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United States Senate 

PERMANENT SUBCOMMITTEE ON INVESTIGATIONS 

Committee on Homeland Security and Governmental Affairs 

Carl Levin, Chairman 

Tom Coburn, Ranking Minority Member 



FEDERAL SUPPORT FOR AND 
INVOLVEMENT IN STATE AND LOCAL 

FUSION CENTERS 

MAJORITY AND MINORITY 
STAFF REPORT 

PERMANENT SUBCOMMITTEE 
ON INVESTIGATIONS 

UNITED STATES SENATE 




October 3, 2012 



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SENATOR CARL LEVIN 
Chairman 

SENATOR TOM COBURN, M.D. 
Ranking Minority Member 

PERMANENT SUBCOMMITTEE ON INVESTIGATIONS 

ELISE J. BEAN 

Staff Director and Chief Counsel 
ZACHARY I. SCH RAM 

Senior Counsel 

CHRISTOPHER J. BARKLEY 

Staff Director to the Minority 
JUSTIN J. ROOD 
Senior Investigator to the Minority 

KEITH B. ASHDOWN 
Chief Investigator to the Minority 
ANDREW C. DOCKHAM 
Counsel to the Minority 
DANIEL P. LIPS 
Policy Advisor & Investigator to the Minority 
KATHRYN M. EDELMAN 
Detailee 
JOHN DEDONA 
Detailee 
SARAH DEUTSCHMANN 
Detailee 
MARY McKOY 
Detailee 

BRENNEN BRITTON 

Law Clerk 
JACQUELINE JONES 

Law Clerk 



MARY D. ROBERTSON 

Chief Clerk 



10/2/12 

Permanent Subcommittee on Investigations 

199 Russell Senate Office Building - Washington, D.C. 20510 
Majority : 202/224-9505 - Minority : 202/224-3721 
Web Address : http://www.hsgac.senate.gov/subcommittees/investigations 



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FEDERAL SUPPORT FOR AND INVOLVEMENT 
IN STATE AND LOCAL FUSION CENTERS 

TABLE OF CONTENTS 

I. EXECUTIVE SUMMARY 1 

II. SUBCOMMITTEE INVESTIGATION 5 

III. BACKGROUND 10 

A. History 10 

B. DHS Intelligence and Analysis (I& A) 17 

(1) Homeland Intelligence Reports (HIRs) 18 

(2) I&A Personnel 20 

(3) Drafting Fusion Center HIRs 22 

(4) DHS Enhanced Review of HIRs 23 

C. Funding State and Local Fusion Centers 24 

IV. DHS' SUPPORT FOR AND INVOLVEMENT IN STATE AND LOCAL FUSION 
CENTERS DOES NOT GENERATE TIMELY, USEFUL INTELLIGENCE FOR 
FEDERAL COUNTERTERRORISM EFFORTS 26 

A. Overview 26 

B. Reporting from Fusion Centers was Often Flawed, Unrelated to Terrorism .... 31 

(1) Some Reports Had "Nothing of Value" 32 

(2) If Published, Some Drafting Reporting Could Have Violated the Privacy Act . . 35 

(3) Most Fusion Center Reporting Related to Drug Smuggling, Alien Smuggling, 

or Other Criminal Activity 39 

C. Terrorism-Related Reporting was Often Outdated, Duplicative, and 
Uninformative 40 

(1) Some Terrorism-Related Reports Were Based on Older Published Accounts ... 40 

(2) Many Terrorism-Related HIRs from Fusion Centers Appeared to Duplicate a 
Faster, More Efficient Information-Sharing Process 42 

D. DHS Intelligence Reporting Officials Who Repeatedly Violated Guidelines 

Faced No Sanction 45 

E. DHS Did Not Sufficiently Train Its Fusion Center Detailees to Legally and 
Effectively Collect and Report Intelligence 47 

F. "Two Different Chains of Command" 51 

G. Short-Staffing and Reliance on Underqualified, Underperforming Contract 
Employees Hampered Reporting Efforts 52 

H. Reporting Officials Aren't Evaluated on the Quality of Their Reporting 54 

I. A Hastily-Implemented and Poorly Coordinated Review Process Delayed 
Reporting by Months 55 

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J. Retaining Inappropriate Records is Contrary to DHS Policies and the 

Privacy Act 57 

K. Problems with DHS Reporting Acknowledged, But Unresolved 59 

V. DHS DOES NOT ADEQUATELY OVERSEE ITS FINANCIAL SUPPORT 

FOR FUSION CENTERS 61 

A. Overview 61 

B. DHS Does Not Know How Much It Has Spent to Support Fusion Centers 62 

C. DHS Does Not Exercise Effective Oversight of Grant Funds Intended for 

Fusion Centers 64 

(1) FEM A Monitoring Reports 65 

(2) A-133 Audits 70 

D. DHS Grant Requirements Do Not Ensure States Spend Fusion Center Funds 
Effectively 71 

(1) Using Fusion Center Funds on Chevrolet Tahoes 73 

(2) Using Fusion Center Funds on Rent 75 

(3) Using Fusion Center Funds on Wiretap Room 77 

(4) Using Fusion Center Funds on Computers for County Medical Examiner 78 

(5) Using Fusion Center Funds for Surveillance Equipment, Computers, 
Televisions 79 

(6) Using Fusion Center Funds for Shifting Information Technology Needs 80 

VI. FUSION CENTERS HAVE BEEN UNABLE TO MEANINGFULLY 
CONTRIBUTE TO FEDERAL COUNTERTERRORISM EFFORTS 83 

A. Overview 83 

B. Two Federal Assessments Found Fusion Centers Lack Basic Counterterrorism 
Capabilities 85 

(1) 2010 Assessment 85 

(2) 2011 Assessment 88 

C. Despite Promises, DHS Has Not Assessed Fusion Center Performance 89 

D. Some DHS-Recognized Fusion Centers Do Not Exist 90 

(1) Wyoming 91 

(2) Philadelphia Fusion Center 92 

E. Many Fusion Centers Do Not Prioritize Counterterrorism Efforts 93 

F. DHS "Success Stories" Do Not Demonstrate Centers' Value to Counterterrorism 
Efforts 96 

(1) Najubullah Zazi Case 96 

(2) Faisal Shahzad Case - NYSIC 98 

(3) Florida Fusion Center 99 

(4) Francis "Schaeffer" Cox Case 99 



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G. Fusion Centers May Have Hindered, Not Aided, Federal Counterterrorism 

Efforts 101 

(1) Russian "Cyberattack" in Illinois 101 

(2) Shooting of Representative Giffords and 18 Others 103 

(3) Missouri MIAC Militia Report 104 

VII. RECOMMENDATIONS 106 



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FEDERAL SUPPORT FOR AND INVOLVEMENT IN 
STATE AND LOCAL FUSION CENTERS 



I. EXECUTIVE SUMMARY 

Sharing terrorism-related information between state, local and federal officials is crucial 
to protecting the United States from another terrorist attack. Achieving this objective was the 
motivation for Congress and the White House to invest hundreds of millions of taxpayer dollars 
over the last nine years in support of dozens of state and local fusion centers across the United 
States. 1 Congress directed the Department of Homeland Security (DHS) to lead this initiative. 
A bipartisan investigation by the Permanent Subcommittee on Investigations has found, 
however, that DHS' work with those state and local fusion centers has not produced useful 
intelligence to support federal counterterrorism efforts. 

The Subcommittee investigation found that DHS-assigned detailees to the fusion centers 
forwarded "intelligence" of uneven quality - oftentimes shoddy, rarely timely, sometimes 
endangering citizens' civil liberties and Privacy Act protections, occasionally taken from 
already-published public sources, and more often than not unrelated to terrorism. 

The Subcommittee investigation also found that DHS officials' public claims about 
fusion centers were not always accurate. For instance, DHS officials asserted that some fusion 
centers existed when they did not. At times, DHS officials overstated fusion centers' "success 
stories." At other times, DHS officials failed to disclose or acknowledge non-public evaluations 
highlighting a host of problems at fusion centers and in DHS' own operations. 

Since 2003, over 70 state and local fusion centers, supported in part with federal funds, 
have been created or expanded in part to strengthen U.S. intelligence capabilities, particularly to 
detect, disrupt, and respond to domestic terrorist activities. DHS' support for and involvement 
with these state and local fusion centers has, from the beginning, centered on their professed 
ability to strengthen federal counterterrorism efforts. 

Under the leadership of Senator Coburn, Ranking Subcommittee Member, the 
Subcommittee has spent two years examining federal support of fusion centers and evaluating 
the resulting counterterrorism intelligence. The Subcommittee's investigative efforts included 
interviewing dozens of current and former Federal, state and local officials, reviewing more than 
a year's worth of intelligence reporting from centers, conducting a nationwide survey of fusion 
centers, and examining thousands of pages of financial records and grant documentation. The 
investigation identified problems with nearly every significant aspect of DHS' involvement with 
fusion centers. The Subcommittee investigation also determined that senior DHS officials were 
aware of the problems hampering effective counterterrorism work by the fusion centers, but did 
not always inform Congress of the issues, nor ensure the problems were fixed in a timely 
manner. 



1 Congress has defined fusion centers as "a collaborative effort of 2 or more Federal, State, local, or tribal 
government agencies that combines resources, expertise, or information with the goal of maximizing the ability of 
such agencies to detect, prevent, investigate, apprehend, and respond to criminal or terrorist activity." 



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Regarding the centers themselves, the Subcommittee investigation learned that a 2010 
assessment of state and local fusion centers conducted at the request of DHS found widespread 
deficiencies in the centers' basic counterterrorism information-sharing capabilities. DHS did not 
share that report with Congress or discuss its findings publicly. When the Subcommittee 
requested the assessment as part of its investigation, DHS at first denied it existed, then disputed 
whether it could be shared with Congress, before ultimately providing a copy. 

In 201 1, DHS conducted its own, less rigorous assessment of fusion centers. While its 
resulting findings were more positive, they too indicated ongoing weaknesses at the fusion 
centers. 

The findings of both the 2010 and 2011 assessments contradict public statements by DHS 
officials who have described fusion centers as "one of the centerpieces of our counterterrorism 

2 3 

strategy," and "a major force multiplier in the counterterrorism enterprise." The Subcommittee 
investigation found that the fusion centers often produced irrelevant, useless or inappropriate 
intelligence reporting to DHS, and many produced no intelligence reporting whatsoever. 

Despite reviewing 13 months' worth of reporting originating from fusion centers from 
April 1, 2009 to April 30, 2010, the Subcommittee investigation could identify no reporting 
which uncovered a terrorist threat, nor could it identify a contribution such fusion center 
reporting made to disrupt an active terrorist plot. Instead, the investigation found: 

• Nearly a third of all reports - 188 out of 610 - were never published for use within 
DHS and by other members of the intelligence community, often because they lacked 
any useful information, or potentially violated department guidelines meant to protect 
Americans' civil liberties or Privacy Act protections. 

• In 2009, DHS instituted a lengthy privacy and civil liberties review process which 
kept most of the troubling reports from being released outside of DHS; however, it 
also slowed reporting down by months, and DHS continued to store troubling 
intelligence reports from fusion centers on U.S. persons, possibly in violation of the 
Privacy Act. 

• During the period reviewed, DHS intelligence reporting suffered from a significant 
backlog. At some points, hundreds of draft intelligence reports sat for months before 
DHS officials made a decision about whether to release them to the intelligence 
community. DHS published many reports so late - typically months late, but 
sometimes nearly a year after they were filed - that many were considered "obsolete" 
by the time they were released. 

• Most reporting was not about terrorists or possible terrorist plots, but about criminal 
activity, largely arrest reports pertaining to drug, cash or human smuggling. 

• Some terrorism-related "intelligence" reporting was based on older news releases or 
media accounts. 

• Some terrorism-related reporting also appeared to be a slower-moving duplicate of 
information shared with the National Counter Terrorism Center through a much 



2 Remarks by DHS Secretary Janet Napolitano, National Fusion Center Conference, Denver, Colorado (3/15/201 1). 

3 Testimony of Caryn Wagner, "Homeland Security Department Intelligence Programs and State and Local Fusion 
Centers," before the House Subcommittee on Homeland Security of the Committee on Appropriations (3/4/2010). 



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quicker process run by the Federal Bureau of Investigation's Terrorist Screening 
Center. 

In interviews, current and former DHS officials involved in the fusion center reporting 
process stated they were aware that "a lot of [the reporting] was predominantly useless 
information," as one DHS official put it. 4 A former reporting branch chief said that while he was 
sometimes proud of the intelligence his unit produced, "There were times when it was, 'what a 
bunch of crap is coming through.'" 5 

The Subcommittee investigation also examined DHS' management of the fusion center 
counterterrorism intelligence reporting process. The investigation discovered: 

• DHS required only a week of training for intelligence officials before sending them to 
state and local fusion centers to report sensitive domestic intelligence, largely 
concerning U.S. persons. 

• Officials who routinely authored useless or potentially illegal fusion center 
intelligence reports faced no sanction or reprimand. 

The Subcommittee investigation also reviewed how the Federal Emergency Management 
Agency (FEMA), a component of DHS, distributed hundreds of millions of taxpayer dollars to 
support state and local fusion centers. DHS revealed that it was unable to provide an accurate 
tally of how much it had granted to states and cities to support fusion centers efforts, instead 
producing broad estimates of the total amount of federal dollars spent on fusion center activities 
from 2003 to 2011, estimates which ranged from $289 million to $1.4 billion. 

The Subcommittee investigation also found that DHS failed to adequately police how 
states and municipalities used the money intended for fusion centers. The investigation found 
that DHS did not know with any accuracy how much grant money it has spent on specific fusion 
centers, nor could it say how most of those grant funds were spent, nor has it examined the 
effectiveness of those grant dollars. 

The Subcommittee conducted a more detailed case study review of expenditures of DHS 
grant funds at five fusion centers, all of which lacked basic, "must-have" intelligence 
capabilities, according to assessments conducted by and for DHS. The Subcommittee 
investigation found that the state and local agencies used some of the federal grant money to 
purchase: 

• dozens of flat-screen TVs; 

• Sport Utility Vehicles they then gave away to other local agencies; and 

• hidden "shirt button" cameras, cell phone tracking devices, and other surveillance 
equipment unrelated to the analytical mission of a fusion center. 

All of those expenditures were allowed under FEMA's rules and guidance, DHS officials 
told the Subcommittee. Yet none of them appeared to have addressed the deficiencies in the 



4 Subcommittee interview of former DHS Senior Reports Officer (3/21/2012). 

5 Subcommittee interview of Harold "Skip" Vandover (3/22/2012). 



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centers' basic information analysis and sharing capabilities, so they could better contribute to 
federal counterterrorism efforts. 

Every day, tens of thousands of DHS employees go to work dedicated to keeping 
America safe from terrorism; federal funding of fusion centers was intended to advance that 
federal objective. Fusion centers may provide valuable services in fields other than terrorism, 
such as contributions to traditional criminal investigations, public safety, or disaster response and 
recovery efforts. In this investigation, the Subcommittee confined its work to examining the 
federal return on its extensive support of state and local fusion centers, using the 
counterterrorism objectives established by law, Executive strategy, and DHS policy statements 
and assessments. 

The investigation found that top DHS officials consistently made positive public 
comments about the value and importance of fusion centers' contributions to federal 
counterterrorism efforts, even as internal reviews and non-public assessments highlighted 
problems at the centers and dysfunction in DHS' own operations. But DHS and the centers do 
not shoulder sole responsibility for the fusion centers' counterterrorism intelligence failures. 
Congress has played a role, as well. Since Congress created DHS in 2003, dozens of committees 
and subcommittees in both Houses have claimed jurisdiction over various aspects of the 
department. DHS officials annually participate in hundreds of hearings, briefings, and site visits 
for Members of Congress and their staffs. At Congress' request, the department annually 
produces thousands of pages of updates, assessments and other reports. Yet amid all the 
Congressional oversight, some of the worst problems plaguing the department's fusion center 
efforts have gone largely undisclosed and unexamined. 

At its conclusion, this Report offers several recommendations to clarify DHS' role with 
respect to state and local fusion centers. The Report recommends that Congress and DHS revisit 
the statutory basis for DHS support of fusion centers, in light of the investigation's findings. It 
also recommends that DHS improve its oversight of federal grant funds supporting fusion 
centers; conduct promised assessments of fusion center information- sharing; and strengthen its 
protection of civil liberties in fusion center intelligence reporting. 



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II. SUBCOMMITTEE INVESTIGATION 

The past decade has seen a proliferation of "fusion centers" in states and cities around the 
country. Congress has defined fusion centers as "a collaborative effort of 2 or more Federal, 
State, local, or tribal government agencies that combines resources, expertise, or information 
with the goal of maximizing the ability of such agencies to detect, prevent, investigate, 
apprehend, and respond to criminal or terrorist activity." 6 Although operated by state, local or 
tribal governments, these centers typically receive significant financial and logistical support 
from the federal government, primarily from the Department of Homeland Security (DHS). 

A failure among government officials to share timely, relevant information on terrorist 
threats was widely credited with contributing to the broader failure to protect the United States 
from the September 11, 2001 terrorist attacks by al Qaeda. In the aftermath of those attacks, 
Congress and the White House made sweeping reforms intended to improve how officials in 
agencies at all levels of government share information to prevent future terrorist attacks. 

As part of those reform efforts, both the executive and legislative branches have 
championed state and local fusion centers as critical tools for the federal government to share 
terrorism-related information with states and localities. In 2007, Congress designated DHS as 
the lead federal partner for fusion centers. 9 

As state and local entities, the exact missions of individual fusion centers are largely 
beyond the authority of the federal government to determine. Many have chosen to focus their 
efforts on local and regional crime. In Nevada, the Southern Nevada Counterterrorism Center 
tracks incidents of violence in schools. 10 However, federal officials and lawmakers established 
federal grant programs for the centers premised primarily on involving fusion centers in federal 
efforts to prevent another terrorist attack. They touted the centers' ability to gather 
counterterrorism information from local sources and share it with the federal government; in 
turn, federal officials were instructed to share with the centers threat information gathered and 
analyzed on the federal level to ensure a common awareness of terrorist threats. Support for the 
centers grew, funding increased, information networks expanded, and federal officials were sent 
to work from and assist the centers. 

Today, DHS provides millions of dollars in federal grant funds to support state and local 
fusion center efforts. It details personnel to the centers, and offers them guidance, training and 



6 Implementing Recommendations of the 9/11 Commission Act of 2007, P.L. 110-53, § 511, 121 Stat. 317, 318-24 
(2007). http://www.gpo.gov/fdsvs/pkg/PLAW-110publ53/pdf/PLAW-110publ53.pdf . 

7 "201 1 Fusion Center Federal Cost Survey: Results," DHS (6/2012). The Department of Justice also provides 
support to some fusion centers. 

8 See "9/1 1 Commission Report," National Commission on Terrorist Attacks Upon the United States (7/22/2004), at 
400, http://govinfo.library.unt.edu/91 l/report/91 lReport.pdf . 

9 Implementing Recommendations of the 9/11 Commission Act of 2007, P.L. 110-53, § 511, 121 Stat. 317, 318-24 
(2007). http://www.gpo.gov/fdsvs/pkg/PLAW-110publ53/pdf/PLAW-110publ53.pdf . 

10 8/31/2012 Mike Blasky, "Fusion center helps police with school violence prevention," Las Vegas Review-Journal , 
http://www.lvri.com/news/police-finalists-for-award-for-school-violence-prevention-168226076.html . 



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technology. The Department promotes its support or involvement with 77 fusion centers, 
located in nearly every state and most major urban areas. 

DHS funds state and local fusion centers through its Federal Emergency Management 
Agency (FEMA) grant programs. DHS provides information, logistical support, technology and 
personnel to the centers through its State and Local Program Office (SLPO), part of its Office of 
Intelligence and Analysis (I&A). DHS personnel also draft intelligence reports based on 
information received at fusion centers, which the agency then processes for release through its 
Reporting Branch (RB), also a part of I&A. 12 

The value of fusion centers to the federal government should be determined by tallying 
the cost of its investment, and the results obtained. Yet, despite spending hundreds of millions of 
dollars on state and local fusion centers, DHS has not attempted to conduct a comprehensive 
assessment of the value federal taxpayers have received for that investment. 

Several years ago, when the Department formally committed itself to supporting fusion 
centers, it made an explicit argument for how the centers would contribute to federal 
counterterrorism efforts. That argument, contained in DHS's 2006 blueprint for engaging with 
fusion centers, provides a framework for examining fusion centers' contributions to federal 
taxpayers. In that plan, DHS identified the benefits it expected to receive from its involvement 
with the centers. 

Known as the "State and Local Fusion Center Implementation Plan," it emphasized the 
counterterrorism benefits to DHS of obtaining routine access to locally-derived information to 
support its mission. "Our objective is to create partnerships with . . . existing State & Local 
Fusion Centers (SLFCs) ... to improve the flow of threat information between DHS and the 
SLFCs, and to improve the effectiveness of the Centers as a group," Charles Allen, then DHS 
Under Secretary for Intelligence & Analysis, wrote in a memo accompanying the plan to then- 
DHS Secretary Michael Chertoff. 13 

Mr. Allen began the plan itself with a quote from the 9/1 1 Commission's final report. It 
noted the panel had concluded that government officials failed to "connect the dots" prior to the 
September 11, 2001 attacks, and that "DHS was created, in part, to address that issue." 



1 1 "Preventing Terrorism Results," DHS website, http://www.dhs.gov/topic/preventing-terrorism-results , accessed 
9/19/2012. In 2010, a federal assessment could confirm at best 68 in existence. "2010 Fusion Center Baseline 
Capabilities Assessment," PM-ISE, (10/2010) at 8, DHS-HSGAC-FC-007231. 

12 "Standard Operating Procedure for Homeland Intelligence Report Production," DHS I&A Reporting Branch 
(6/25/2010), at 4, DHS-HSGAC-FC-056471. Other branches of I&A prepare analytic reports for distribution to 
fusion centers, as well as joint analytical products in conjunction with fusion center personnel. Other DHS 
components also assign representatives to fusion centers. 

13 Memorandum from Charles E. Allen to Michael Chertoff, "SUBJECT: State and Local Fusion Center 
Implementation Plan" (3/16/2006), DHS-HSGAC-FC-004031. 



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"Based on the legislative mandate ... it is DHS's mission to ensure that we effectively 
collaborate with Federal, State, Local and Private Sector elements to share information 
concerning terrorist threats," Mr. Allen's plan stated. 14 

Specifically, Mr. Allen's plan listed nine "values accruing to DHS" from fusion center 
involvement: 

• Improved information flow from State and Local entities to DHS 

• Improved situational awareness at the Federal level 

• Improved access to Local officials 

• Consultation on State and Local issues 

• Access to non-traditional information sources 

• Clearly defined information gathering requirements 

• Improved intelligence analysis and production capabilities 

• Improved intelligence/information sharing and dissemination capabilities 

• Improved prevention, protection, response and recovery capabilities. 15 

In 2008, the Bush Administration also produced a list of the baseline capabilities that 
every fusion center should have to contribute in a meaningful way to federal counterterrorism 
efforts. 16 

Given the substantial and growing federal investment in state and local fusion centers, the 
Subcommittee undertook a review of their activities. The Subcommittee investigation initially 
set out to answer three questions: First, how much has the federal government spent to support 
state and local fusion centers? Second, based on benefits anticipated by language in statute, 
executive directives and DHS's own 2006 plan, what has DHS received in return for its 
investment? And third, is the return worth the cost? 

The Subcommittee immediately ran into several roadblocks in its review. First, DHS was 

17 

unable to produce a complete and accurate tally of the expense of its support for fusion centers. 
Indeed, for years it has struggled to identify not only what money it has spent or granted to 

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enhance fusion centers, but also how many personnel it has detailed to the centers. Also, while 



Memorandum from Charles E. Allen to Michael Chertoff, "SUBJECT: State and Local Fusion Center 
Implementation Plan" (3/16/2006), at 6, 10, DHS-HSGAC-FC-004031. 

15 Id. at 3, DHS-HSGAC-FC-004035. For a fuller discussion of DHS' analysis, see CRS, "Fusion Centers: Issues 
and Options for Congress," updated January 18, 2008, at 3-6. 

16 Department of Justice, Global Justice Information Sharing Initiative, "Baseline Capabilities for State and Major 
Urban Area Fusion Centers," September 2008, http://www.it.oip.gov/documents/baselinecapabilitiesa.pdf . 

17 This year DHS reported what it believes it has spent on fusion centers directly, which totals $17.2 million, but that 
figure does not include DHS funds granted to state and local governments intended to support fusion centers, which 
is believed to be a significant portion of federal spending on fusion centers. "201 1 Fusion Center Federal Cost 
Survey: Results," DHS (6/2012). 

18 Congress has repeatedly pressed DHS for detailed reporting on its fusion center efforts. In 2006, appropriators 
began requesting quarterly reports from DHS on its fusion center efforts. See H. Rept 109-699, H. Rept 1 10-181, S. 
Rept. 1 10-84, P.L. 1 10-329. However, that failed to yield consistently prompt and accurate responses from the 
department. In 2010, appropriators noted DHS "has failed to submit the quarterly reports on this activity." H. Rept 
1 1 1-157. They criticized DHS for creating "an unacceptable lack of visibility into DHS's intelligence programs," 
and "disregard [ing] Congress' explicit direction to provide timely information." H. Rept. 1 1 1-298. 



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DHS has made attempts to assess the centers' ability to operate, it has never evaluated the quality 
or impact of the centers' contributions to federal counterterrorism efforts using the 2006 criteria 
it specified. 

Faced with missing, ambiguous and inadequate data, the Subcommittee investigation 
refocused its efforts, to answer three more fundamental questions: First, how well did DHS 
engage operationally with fusion centers to obtain useful intelligence, and share it with other 
federal agencies and its own analysts? Second, how well did DHS award and oversee the 
millions of dollars in grant funds it awards states and cities for fusion center projects? Third, 
how capable were state and local fusion centers of conducting intelligence-related activities in 
support of the federal counterterrorism mission? 

Over a period of two years, the Subcommittee reviewed more than 80,000 pages of 
documents, including reviews, audits, intelligence reports, emails, memoranda, grant 
applications, news accounts, and scholarly articles; conducted a nationwide survey of fusion 
centers; and interviewed over 50 current and former DHS officials, outside experts, and state and 
local officials. 

On the first issue, the Subcommittee investigation found that DHS's involvement with 
fusion centers had not produced the results anticipated by statute, White House strategies and 
DHS's own 2006 plan. Specifically, DHS's involvement with fusion centers appeared not to 
have yielded timely, useful terrorism-related intelligence for the federal intelligence community. 
In addition, the Subcommittee investigation found that DHS has not had the proper policies, 
training, personnel or practices in place to responsibly and timely receive information from state 
and local fusion centers, and make it available to its own analysts and other federal agencies. 

On the second issue, the Subcommittee investigation found that DHS did not adequately 
monitor the amount of funding it directed to support fusion centers; failed to conduct meaningful 
oversight of how state and local agencies spent grant funds DHS intended to support fusion 
centers; did not ensure the grants it made to fusion center projects were yielding the progress 
state and local officials promised; and did not attempt to determine whether the end product of its 
efforts and spending were commensurate with the level of its investment. 19 

On the third issue, the Subcommittee investigation found that many fusion centers lacked 
either the capability or stated objective of contributing meaningfully to the federal 
counterterrorism mission. Many centers didn't consider counterterrorism an explicit part of their 
mission, and federal officials said some were simply not concerned with doing counterterrorism 
work. 



These failures have not gone unnoticed by Congress. In 2010, Senate appropriators explicitly stated their 
expectation "that performance metrics will be developed to judge the success of I&A's SLFC [State and Local 
Fusion Center] program. S. Rept. 1 1 1-222. The following year, House appropriators directed DHS "to develop 
robust programmatic justification to better identify and quantify the Federal benefit and return on investment from 
the State and Local Fusion Center (SLFC) program," and present it by February 2012. A DHS official told the 
Subcommittee in April 2012 they were still working on such an evaluation. Subcommittee interview of Joel Cohen 
(4/22/2012). 



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Despite these problems, DHS officials have been consistent in their praise for fusion 
centers as counterterrorism tools when speaking to Congress and the American public. DHS 
Secretary Janet Napolitano has described them as "one of the centerpieces of our 

20 

counterterrorism strategy," and Caryn Wagner, DHS's top intelligence official, told Congress 

21 

they are "a vital tool for strengthening homeland security." A May 2012 report from DHS 
stated that fusion centers "play a vital role in improving the Nation's ability to safeguard the 
Homeland." 22 

But in internal assessments and interviews with the Subcommittee, knowledgeable 
officials from DHS and the intelligence community have said that most fusion centers were not 
capable of effective intelligence- sharing work, whether it is receiving terrorism-related 
information, analyzing it, or sharing it with federal officials and others. They have also admitted 
that DHS's own practices have fallen well short of what is necessary for an effective intelligence 
enterprise. 

Meanwhile, Congress and two administrations have urged DHS to continue or even 
expand its support of fusion centers, without providing sufficient oversight to ensure the 
intelligence from fusion centers is commensurate with the level of federal investment. 

As a result, by its own estimates DHS has spent somewhere between $289 million and 
$1.4 billion in public funds 23 to engage state and local fusion centers in the federal 
counterterrorism mission, but has little to show for it. 

The Subcommittee investigation did not examine the expense, performance or value of 
fusion centers to the state and local governments which own and operate them, and makes no 
finding or recommendation in this regard. Fusion centers may provide valuable local services in 
other fields, such as traditional criminal investigations, public safety, or disaster and recovery 
efforts. The Subcommittee confined its work to examining federal support for and involvement 
in the state and local fusion centers, using the counterterrorism objectives established by law and 
White House strategy, and DHS policy statements and assessments. 



Remarks by DHS Secretary Janet Napolitano, National Fusion Center Conference (3/15/201 1). 

21 Testimony of Caryn Wagner before the House Counterterrorism and Intelligence Subcommittee of the Committee 
on Homeland Security (5/12/2010). 

22 "201 1 National Network of Fusion Centers, Final Report, May 2012," DHS -HSGAC-FC -057027, pp. v-vi. 

23 Figures are based on separate estimates DHS provided to the Subcommittee. "Fusion Center Funding Report," 
Spreadsheet, 6/22/2012, DHS HSGAC FC 058336, and "Fusion Keyword Search Solution Area Funding Report," 
Spreadsheet, 2/24/2010, DHS HSGAC FC 057017, at 2. 



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III. BACKGROUND 

Fusion centers, few of which existed before the September 11, 2001 attacks, now number 
as many as 77, according to DHS, and operate in almost every state and many major cities in the 

24 

country. Their existence has stirred up concerns about domestic intelligence gathering 
practices, and questions about the federal government's involvement in state and local law 
enforcement operations. To understand those concerns, and the design and execution of the 
Subcommittee's investigation, it is helpful to understand the origins of fusion centers; the 
evolution of DHS's engagement with the centers; how DHS supports fusion centers, particularly 
through grant funding; and how DHS gathers counterterrorism intelligence from and shares 
intelligence with state and local fusion centers. 

A. History 

Prior to the September 11, 2001, attacks, few states or localities operated fusion centers. 
The Department of Homeland Security, now the federal government's largest supporter of fusion 
centers, had not yet been created. 

The Homeland Security Act of 2002 (P.L. 107-296), which then-President George W. 
Bush signed into law on November 25, 2002, created the Department of Homeland Security 
(DHS). That law did not mandate the new agency provide support to fusion centers - indeed, it 
does not mention fusion centers at all - but it did give DHS sweeping responsibilities to gather, 
fuse and share terrorism-related information with federal, state and local entities. Specifically, 
the law directed DHS to: 

• [A]ccess, receive and analyze law enforcement information, intelligence information, 
and other information from the Federal Government, State, and local government 
agencies (including law enforcement agencies), and private sector entities, and to 
integrate such information in order to - 

(A) identify, assess, detect, and understand threats of terrorism against the United 
States and to the homeland; 

(B) detect and identify threats of terrorism against the United States; and 

(C) understand such threats in light of actual and potential vulnerabilities to the 
homeland.... 

• Consult with State and local governments and private sector entities to ensure 
appropriate exchanges of information, relating to threats of terrorism against the 
United States.... 

• Disseminate or coordinate dissemination of terrorism information and warnings 
(including some law enforcement information) to state and local entities, the private 
sector, and the public[.] 26 



"Preventing Terrorism Results," DHS.gov, http://www.dhs.gov/topic/preventing-terrorism-results , accessed 
September 16, 2012. A 2010 assessment performed for DHS, however, documented only 68 functional fusion 
centers. "2010 Baseline Capabilities Asssessment," PM-ISE, (10/2010), DHS-HSGAC-FC-007031. 
25 January 18, 2008, Rollins, John, "Fusion Centers: Issues and Options for Congress," Congressional Research 
Service, RL34070, at 15. 



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DHS officially opened its doors in March 2003, equipped with that mandate and legal 

27 4 " 

authority. Two months later, President Bush created the interagency Terrorist Threat 

28 

Integration Center (TTIC), to centralize threat information. In September, he created the 
Terrorist Screening Center (TSC), an interagency operation administered by the Federal Bureau 

29 

of Investigation (FBI), to consolidate the federal government's many terror watchlists. The 
White House's decision to create these two centers outside of DHS led some to observe that 
these entities "overlap with, duplicate ... or even trump" the Department's statutory intelligence 
duties, as DHS's own inspector general put it. 30 

The following year, 2004, was an important year for the growth of state and local fusion 
centers, even as developments further constrained DHS's role in counterterrorism intelligence. 
That July, the National Commission on Terrorist Attacks Upon the United States, better known 
as the 9/11 Commission, released its public report detailing the circumstances surrounding the 
September 11, 2001 terrorist attacks. Among its findings, the Commission highlighted the 
failure of public officials to "connect the dots," or share key terrorism-related intelligence in time 

3 1 

to prevent the attack/ 

Although the Commission did not refer to fusion centers in its recommendations, 
advocates of the centers, including DHS, have consistently interpreted the panel's 
recommendations to improve information-sharing as a call for increased federal support for 
fusion centers. 32 

The Commission's report spurred Congress and the White House to action, passing bills 
and issuing executive orders which reorganized U.S. government agencies' roles and 
responsibilities in fighting terrorism. Those moves boosted the importance of federal- state-local 
information-sharing efforts. They also all but shifted responsibility for facilitating information- 
sharing, integrating intelligence, and analyzing threat information at the federal level from DHS 
to a new federal interagency body, the National Counterterrorism Center (NCTC), part of the 
Office of the Director of National Intelligence. 



lb Homeland Security Act of 2002, P.L. 107-296 (1 1/25/2002). 

27 DHS website, "Creation of the Department of Homeland Security," http://www.dhs.gov/creation-department- 
homeland-security , accessed 9/16/2012. 

28 "The Terrorist Threat Integration Center," FBI.gov, http://www.fbi.gov/news/stories/2004/april/threat 043004 , 
accessed 9/24/2012. 

29 "New Terrorist Screening Center Established" (9/13/2003), FBI publication, 
http://www.fbi.gov/news/stories/2003/september/tsc091603 . 

30 "DHS Performance and Accountability Report, Fiscal Year 2003" (2/13/2004), 
http://www.dhs.gov/xlibrarv/assets/PerformanceAccountabilitvReportFY03.pdf , at 37. 

31 July 2004, "The 9/1 1 Commission Report," Chapter 13, the National Commission on Terrorist Attacks Upon the 
United States, http://govinfo.library.unt.edu/91 l/report/91 IReport Chl3.pdf . 

32 As just one example, DHS pointed to the landmark document in its 201 1 publication, "Implementing 9/1 1 
Commission Recommendations, Progress Report." In it DHS called fusion centers a "critical feature" of the United 
States' "strengthened homeland security enterprise" that "align with - and respond to" the 9/1 1 Commission's 
recommendation of "expanding information sharing." "Implementing 9/1 1 Commission Recommendations, Progress 
Report," DHS, at , http://www.dhs.gov/xlibrary/assets/implementing-9-l 1 -commission-report -progress-201 l.pdf . 



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The NCTC was created by the 2004 intelligence reform law and replaced the TTIC. 
The 2004 law gave the new center the responsibility for integrating and analyzing terrorist threat 
intelligence from all sources, as well as the job of assessing the terrorist threat to the United 
States. That law, and Executive Order 13356, also created a new office, the Program Manager 
for the Information Sharing Environment (PM-ISE), to help local, state and federal agencies 
better share terrorism-related information. 34 

As other federal agencies and offices took the lead in compiling and analyzing 
counterterrorism information at the federal level, DHS's intelligence operations began to focus 
on a responsibility that received less attention in subsequent reform laws and executive orders: 
information sharing with state, local and tribal partners. 

At that time, DHS was working with 18 state and local intelligence and fusion centers to 
share threat-related information, and officials were working on how to best develop a 
coordinated effort to build their capabilities. 

In 2006, DHS's then intelligence chief, Charles E. Allen, submitted a detailed fusion 
center plan to his superior, then DHS Secretary Michael Chertoff, which highlighted fusion 
centers' potential to aid federal counterterrorism efforts. 

"Harnessing domestic information is the unique DHS contribution to the national-level 
mission to protect the Homeland," Allen's plan read. 36 He called fusion centers "critical sources 
of unique law enforcement information and threat information," and "the natural entry point into 
the State and Local 'systems' for critical threat information from the National Intelligence 

37 J * 

Community." 

"These centers are both suppliers and customers to DHS," Mr. Allen wrote. "We need 
the capability to routinely harvest information and finished intelligence in a timely manner from 

38 

State and Local sources." The plan, Mr. Allen said in his cover memo to Mr. Chertoff, was 
"one of the most important endeavors the Department can undertake right now." 

In presentations to other agencies and Congress, DHS officials stressed fusion centers' 
value as sources of counterterrorism intelligence for the federal government. Robert Riegle was 
a key DHS official involved in the department's fusion center efforts at the time. He told the 



33 See Executive Order No. 13,356, 69 Fed. Reg. 53599 (9/1/ 2004); "Intelligence Reform and Terrorism Prevention 
Act of 2004," P.L. 108-458, 118 Stat. 3638 (2004). 

34 Id. 

35 See 2005 Responses to Questions for the Record submitted by DHS, for the 3/4/2004 hearing, "Department of 
Homeland Security's Information Analysis and Infrastructure Protection Budget Proposal for Fiscal Year 2005," 
House Committee on Homeland Security, http://ftp.resource.org/gpo.gov/hearings/108h/22589.txt . 

36 Memorandum from Charles E. Allen, "State and Local Fusion Center Implementation Plan" (3/16/2006), at 2, 
DHS-HSGAC-FC-00403 1 . 

37 Id. at 9. 

38 Id. 

39 Id.. 



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Subcommittee he gave presentations to Secretary Chertoff, the FBI, and Congress about the 
important contributions fusion centers could make to the federal counterterrorism effort. 40 

"Every single day interrogations occur, in police investigations throughout the United 
States," Mr. Riegle recounted to the Subcommittee. "We could train people in these units ... on 
the seven signs of terror." Local police weren't the only ones DHS could reach as intelligence 
sources through fusion centers, Mr. Riegle said. "We had fire [departments] - one of the few 
people who can enter your home without a warrant is a firefighter." 41 

Mr. Riegle said that he did not believe that access to state and local information was 
really a principal reason for the federal government to support fusion centers, but it was part of 
the pitch. "It was a selling point to the Feds," Mr. Riegle said. "I've got to tell them what the 
benefits are." 42 

DHS Secretary Chertoff approved the plan in June 2006. By the end of that year, at least 
37 fusion centers had begun operations in states including Connecticut, Delaware, Indiana, 
Maine, and North Carolina. 43 

The following year, both Congress and the White House took steps to bolster DHS's 
involvement with fusion centers. Congress passed the "Implementing Recommendations of the 
9/1 1 Commission Act of 2007," which explicated DHS's role in sharing information with state 
and local agencies, 44 even as it called the Department's outreach to those state and local officials 
"haphazard and often accompanied by less than timely results." 45 In the law, legislators directed 
DHS to provide support and coordinate federal involvement with fusion centers. 46 

In the law, Congress established a DHS State, Local, and Regional Fusion Center 
Initiative. The law directed DHS to provide to fusion centers "operational and intelligence 
advice;" conduct exercises with them; provide management assistance; and "review information 
. . . including homeland security information, terrorism information, and weapons of mass 
destruction information that is gathered by State, local, and regional fusion centers; and to 
incorporate such information, as appropriate, into the Department's own such information." 47 



Subcommittee interview of Robert Riegle (6/1/2012). 

41 Id. 

42 Id. 

43 Subcommittee survey of fusion centers (2010). 

44 Implementing Recommendations of the 9/11 Commission Act of 2007, P.L. 110-53, § 511, 121 Stat. 317, 318-24 
(2007). http://www.gpo.gov/fdsvs/pkg/PLAW-110publ53/pdf/PLAW-110publ53.pdf . 

5 Conference Report to Accompany H.R. 1 (7/25/2007), http ://w w w. gpo. go v/fdsys/pkg/CRPT- 
1 10hrpt259/pdf/CRPT-l 10hrpt259.pdf , at 304. 

46 Implementing Recommendations of the 9/11 Commission Act of 2007, P.L. 110-53, § 511, 121 Stat. 317, 318-24 
(2007). http://www.gpo.gov/fdsvs/pkg/PLAW-110publ53/pdf/PLAW-110publ53.pdf . 

47 Id. at 318-24. 



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To underscore the point, Congress urged DHS to "increase its involvement with them 
[state and local fusion centers] and appropriately incorporate their non-Federal information into 
the Department's intelligence products." 

The law also directed DHS to detail intelligence personnel to the centers if the centers 
met certain criteria, several of which required a center to demonstrate a focus on and 
commitment to a counterterrorism mission. Among the criteria the law suggested were "whether 
the fusion center . . . focuses on a broad counterterror approach," whether the center has 
sufficient personnel "to support a broad counterterrorism mission," and whether the center is 
appropriately funded by non-federal sources "to support its counterterrorism mission." 49 

Also in 2007, the Bush Administration focused on improving how officials at all levels of 
government shared terrorism-related information. That October, President Bush released his 
"National Strategy for Information Sharing: Successes and Challenges in Improving Terrorism- 
Related Information Sharing," in which he called for fusion centers to be "the focus . . . within 
the State and local environment for the receipt and sharing of terrorism information, homeland 
security information, and law enforcement information related to terrorism." 50 

President Bush's 2007 report also directed the Federal government to develop for the first 
time a set of minimum operational standards for fusion centers, which would allow officials to 
determine whether a fusion center had "achieved a baseline level of capability." 

In response, in September 2008, the Departments of Justice and Homeland Security 
published "Baseline Capabilities for State and Major Urban Area Fusion Centers." The 
document outlined the basic "structures, processes and tools" fusion centers needed to have in 
place in order to functionally participate in sharing counterterrorism intelligence information 
with the federal government. 51 The capabilities included having a governance structure, a 
staffing plan, and a privacy policy; installing sufficient physical security; developing a funding 
strategy; having a plan to provide training to intelligence analysts; and having processes and 
protocols in place to share relevant information with federal agencies. 

"It is recognized that at the time of writing this document, most fusion centers are in the 
process of achieving these standards and capabilities," the 2008 report stated - underscoring how 
few, if any, fusion centers then possessed all the minimum capabilities to meaningfully 
participate in counterterrorism information- sharing with the federal government. The report 



48 Conference Report to Accompany H.R. 1 (7/25/2007), http://w w w. gpo. go v/fdsys/pkg/CRPT- 
1 10hrpt259/pdf/CRPT-l 10hrpt259.pdf , at 304. 

49 Implementing Recommendations of the 9/11 Commission Act of 2007, P.L. 110-53, § 511, 121 Stat. 317, 318-24 
(2007). http://www.gpo.gov/fdsvs/pkg/PLAW-l 1 0publ53/pdf/PLAW- 1 1 0publ53 .pdf . 

50 October 2007 "The National Strategy for Information Sharing," White House, available at http://georgewbush- 
whitehouse . archives . gov/nsc/info sharing/index, html . 

51 September 2008, "Baseline Capabilities for State and Major Urban Area Fusion Centers," Department of Justice, 
Global Justice Information Sharing Initiative, http://www.it.oip.gov/documents/baselinecapabilitiesa.pdf . For the 
full list of baseline capabilities, please see Appendix A of this Subcommittee report. 



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stated that it expected fusion centers "to take a period of one to five years to achieve all of the 

52 

baseline capabilities." 

Even before the 2008 report was issued, the Bush administration had provided grants to 
fusion centers to develop their capabilities, but it also made clear that it did not believe it was the 
federal government's place to sustain the fusion centers forever. "The funding . . . helps 
fledgling centers get off the ground and start to build fundamental baseline capabilities. This is 
not meant, by the way, to be sustainment funding," explained then-DHS Secretary Michael 

53 

Chertoff in his keynote address to the first annual National Fusion Center Conference in 2007. 
"We are not signing up to fund fusion centers in perpetuity. But we do want to use these grants 
to target resources to help fusion centers make the capital investment and training investment to 
come to maturity. And then, of course, we expect every community to continue to invest in 
sustaining these very important law enforcement tools." 54 

Control of the executive branch changed parties in 2009. At DHS, officials criticized 
their predecessors' efforts to support and benefit from state and local fusion centers. "DHS has 
failed to date to institute a well-coordinated, Department-wide approach to supporting and 
interfacing with state and major urban area fusion centers," wrote Bart Johnson, then the Acting 
Undersecretary of DHS Intelligence and Analysis, to DHS Secretary Janet Napolitano. "This 
shortcoming has resulted in a disjointed and ad hoc approach by DHS elements toward 
supporting and interacting with these centers." 55 

Mr. Johnson proposed that the new DHS Secretary, Janet Napolitano, issue a "Secretarial 
declaration of recommitment" to the fusion center initiative. In place of previous efforts, Mr. 
Johnson envisioned "a robust Department- wide initiative to support the establishment and 
sustainment of a nationwide network of fusion centers." Secretary Napolitano approved the 
proposal, and made fusion centers one of the department's top priorities. 56 "Fusion centers are 
and will be a critical part of our nation's homeland security capabilities. I intend to make them a 
top priority for this department to support them, build them, improve them and work with them," 
she said in a July 2009 speech, after receiving Mr. Johnson's plan. 7 



September 2008, "Baseline Capabilities for State and Major Urban Area Fusion Centers," Department of Justice, 
Global Justice Information Sharing Initiative, http://www.it.oip.gov/documents/baselinecapabilitiesa.pdf . Two 
subsequent DHS assessments, each with different methodologies but both purportedly based to some degree on the 
2008 list of baseline capabilities, have found most fusion centers continue to lack necessary minimum capabilities to 
support the federal counterterrorism mission. "2010 Baseline Capabilities Assessment," PM-ISE, DHS-HSGAC-FC- 
007231; "201 1 National Network of Fusion Centers, Final Report, May 2012," DHS-HSGAC-FC-057027. 

53 1/18/2008 CRS Report, "Fusion Centers: Issues and Options for Congress," John Rollins, at 44, 
http://www.fas.org/sgp/crs/intel/RL34070.pdf . Derived from CRS transcription of Secretary Chertoff s Keynote 
Address to the first annual National Fusion Center Conference (3/6/2007), Footnote 135. 

54 1/18/2008 CRS Report, "Fusion Centers: Issues and Options for Congress," John Rollins, at 44, 
http://www.fas.org/sgp/crs/intel/RL34070.pdf . Derived from CRS transcription of Secretary Chertoff s Keynote 
Address to the first annual National Fusion Center Conference (3/6/2007), Footnote 135. 

55 Memorandum from Bart R. Johnson to Secretary Janet Napolitano, "Subject: DHS State and Local Fusion Center 
Initiative" (7/20/2009), at DHS-HSGAC-FC-058964. 

56 Id. 

57 Remarks by Secretary Napolitano at the Council on Foreign Relations (7/29/2009), DHS.gov, 
http://www.dhs.gov/news/2009/07/29/secretarv-napolitanos-remarks-council-foreign-relations . 



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The White House also publicly embraced fusion centers as part of its anti-terrorism 
strategy. In his 2010 National Security Strategy, President Barack Obama wrote: 

To prevent acts of terrorism on American soil, we must enlist all of our intelligence, law 
enforcement, and homeland security capabilities. 

We will continue to integrate and leverage state and major urban area fusion centers that 
have the capability to share classified information; establish a nationwide framework for 
reporting suspicious activity; and implement an integrated approach to our 
counterterrorism information systems to ensure that the analysts, agents, and officers who 
protect us have access to all relevant intelligence throughout the government. We are 
improving information sharing and cooperation by linking networks to facilitate Federal, 
state, and local capabilities to seamlessly exchange messages and information, conduct 
searches, and collaborate. 

Despite President Obama' s clear focus on fusion centers as counterterrorism tools, some 
Administration officials have at times shifted away from defending the centers' value to federal 
counterterrorism efforts. In recent years, they have emphasized other possible fusion center 
functions, such as disaster recovery, or investigations of crime, sometimes even to the exclusion 
of any counterterrorism mission. 

DHS Secretary Napolitano has alternated between describing fusion centers as a crucial 
part of the department's counterterrorism efforts, and also as centers which do "everything else." 

In March 2009, the Secretary spoke before the National Fusion Center Conference in 
Kansas City, Missouri. Ms. Napolitano explained what she believed was the difference between 
state and local fusion centers and Joint Terrorism Task Forces (JTTFs), FBI-led groups that 
include state and local law enforcement as well as other federal agencies and whose primary 
mission is investigating terrorist threats. Ms. Napolitano said: 

Fusion Centers are not the same as your Joint Terrorism Task Forces (JTTF). They are 
different and they have different roles. The JTTF, as those in the audience know, is an 
FBI-driven group designed to look solely at the issue of terrorism and [the] terrorism 
dimension. The Fusion Centers are designed to look at many, many more things beyond 
that .... [A] serial kidnapper, a gang or organized crime syndicate in an area, a serial or 
pattern murderer all have been handled by Fusion Centers. The JTTFs have a very 
defined specific function, the Fusion Center[s] much broader, and then the Fusion Center 
also includes the capacity for response and recovery. 59 



"2010 National Security Strategy," White House, 
http://www.whitehouse.gov/sites/default/files/rss viewer/national security strategy.pdf . 
59 Remarks by Janet Napolitano before the National Fusion Center Conference (3/1 1/2009), DHS.gov, 
http ://w w w. dhs . go v/ne ws/2009/03/ 1 3/napolitanos-remarks -national-fusion-center-conference . 



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Ms. Napolitano concluded, "Fusion Centers to me are going to be key in how we increase 
our ability to protect the homeland." 60 

In testimony before the Senate in September 2009, DHS Secretary Napolitano was even 
more direct. "I think it's good to explain the difference between a JTTF and a fusion center. A 
JTTF is really focused on terrorism and terrorism-related investigations. Fusion centers are 
almost everything else," Ms. Napolitano said. 61 But then two years later, in a 201 1 speech at the 
National Fusion Center Conference in Denver, Colorado, Ms. Napolitano called fusion centers 
"one of the centerpieces of our counterterrorism strategy." 62 

In March 2012 testimony before the Senate, DHS Secretary Napolitano again stressed 
fusion centers' work beyond counterterrorism. "Their mission is terrorism prevention, but it's 
also much broader than that," Ms. Napolitano said during testimony. "And as [Arizona] 
governor I started one of the first fusion centers in the country. It is an ideal place to co-locate, 
to share information. We use them in a variety of ways," Ms. Napolitano said. 63 

B. DHS Intelligence and Analysis (I&A) 

The Department of Homeland Security's Office of Intelligence and Analysis (I&A) runs 
the department's operational involvement with fusion centers. 64 On one side, its State and Local 
Program Office (SLPO) acts as a service bureau to the fusion centers, dispatching liaison officers 
to fusion centers around the country, helping arrange for security clearances for state and local 
personnel, and providing other training and logistical support for the centers. 65 

On the other side, I&A's Reporting Branch (RB), receives, reviews and publishes so- 
called "raw" intelligence obtained from fusion centers, distributing it to assist DHS and its 
federal intelligence community partners. 66 

Raw intelligence is a report of an event that has not undergone analysis or necessarily 
verification, but is essentially what its name implies. It is typically a report of a single event, 



Remarks by Janet Napolitano before the National Fusion Center Conference (3/1 1/2009), DHS.gov, 
http://www.dhs.gov/news/2009/03/13/napolitanos-remarks-national-fusion-center-conference. 

61 Testimony of DHS Secretary Janet Napolitano before the Senate Homeland Security and Governmental Affairs 
Committee, "Eight Years After 9/11: Confronting the Terrorist Threat to the Homeland" (9/30/2009). 

62 Remarks by DHS Secretary Janet Napolitano, National Fusion Center Conference, Denver, Colorado (3/15/2011). 

63 Testimony of DHS Secretary Janet Napolitano before the Senate Homeland Security and Governmental Affairs 
Committee, "President Obama's Fiscal 2013 Budget Proposal for the Homeland Security Department" (3/21/2012). 

64 I&A also oversees the intelligence activities of the department's component divisions. Its chief is an Under 
Secretary who reports directly to the Secretary of the Department. She is also the Department's Chief Intelligence 
Officer, and in that capacity is responsible to the Director of National Intelligence. I&A is not responsible for the 
department's funding of fusion centers, which is handled through the grants division of the Federal Emergency 
Management Agency (FEMA). 

5 11/2011 "DHS' Efforts to Coordinate and Enhance Its Support and Information Sharing With Fusion Centers, 
OIG- 12-10" DHS Office of Inspector General, at 16-17. 

66 I&A publishes both "raw" intelligence reporting and "finished" analytical products. Raw intelligence is produced 
by the Reporting Branch, which receives the information from DHS personnel mostly outside the directorate, from 
personnel at component agencies, or from detailees in state and local fusion centers. The Reporting Branch also 
receives, reviews and publishes raw intelligence from DHS components. 



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creating the proverbial "dots" of intelligence. For DHS, it could be news of possible terrorist 
precursor activity, an arrest with details indicating cross-border drug smuggling, or information 
regarding a suspected terrorist traveling into or out of the United States. 

Raw intelligence is expected to be fragmentary and more immediate than analytical 
products, which tend to be lengthier, draw from multiple sources, and take more time to produce. 

(1) Homeland Intelligence Reports (HIRs) 

During the 2009-2010 period of reporting the Subcommittee reviewed, raw intelligence 
from fusion centers came to DHS in the form of an intelligence report known as a Homeland 
Intelligence Report, or "HIR." 67 Reporting of raw intelligence handled bv I&A from all 
components of DHS used the HIR format. HIRs are the primary method DHS uses to publish 
and distribute the raw intelligence it gathers to federal intelligence and law enforcement 

69 

agencies. 

I&A required all HIRs, regardless of where they were drafted, to meet the following 
thresholds: 

1. Report information that falls within one of five authorized I&A intelligence 
activities, showing a nexus to Homeland Security issues. This includes 
information related to: 

a. Terrorist threats to the homeland. 

b. Priorities for protective and support measures in response to actual or 
potential threats or hazards to the homeland, including critical 
infrastructure or key resources; a significant public safety, public 
health or environmental impact; political, societal and economic 
infrastructure; border security; the proliferation or use of weapons of 
mass destruction; or other potential catastrophic events including man- 
made and natural disasters. 

c. Departmental support, such as the furtherance of law enforcement 
activities of a component. 

d. General tasks directed by the Secretary of Homeland Security. 

e. Specific tasks directed by statute or presidential directive. 

2. Satisfy valid IC [Intelligence Community] collection requirements or DHS 
SINs [Standing Information Needs] . 



In October 201 1, DHS changed its terminology to "Intelligence Information Reports," or IIRs, but the format was 
largely unchanged. For simplicity, this report uses the term HIRs throughout. 

68 "Standard Operating Procedure for Homeland Intelligence Report Production, v. 1.1" (6/25/2010), DHS-HSGAC- 
FC-056471 

69 Testimony of Caryn Wagner before the House Counterterrorism and Intelligence Subcommittee of the Committee 
on Homeland Security, "The DHS Intelligence Enterprise- Past, Present, and Future" (6/1/201 1). Recently, DHS 
has partnered with DOJ on a "National SAR (Suspicious Activity Reporting) Initiative," which encourages fusion 
centers to file reports on "suspicious activity," which the departments define as "observed behavior reasonably 
indicative of preoperational planning related to terrorism or other criminal activity." Those reports can be written by 
state and local personnel, and are shared through a DOJ-managed process. "About NSI," Nationwide SAR 
Initiative, http://nsi.ncirc.gov/about nsi.aspx . 



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3. Contain information that is generally unavailable via open sources (i.e. 
mainstream media outlets) or from other Intelligence Community reporting. 

4. Contain information that is of interest to federal organizations other than the 

70 

reporting element. 

HIRs from fusion centers are typically composed of information drawn from local law 

7 1 

enforcement records. They are often unclassified, but treated as "For Official Use Only" 
(FOUO), a designation DHS applies to documents to which it cannot restrict access under statute 

72 

or regulation, but which it nonetheless believes to be "sensitive in nature." They are generally 
two to three pages in length, not including the list of recipients which accompanies each report. 
Each HIR not only recounts an event, incident or observation, but also gives data on when that 
information was obtained, the source of the information, and codes indicating the origin of the 
report, the author, the existence of sensitive U.S. person information and why it is legal to 
include it, the date and time it was published, and what intelligence needs the report addresses. 

An HIR does not bear the name of the official who collected the information or authored 
the report, although it does bear a numeric code which corresponds to that official's identity. 
DHS told the Subcommittee that it considers the reporters' identities classified, and has since 

73 

2004. It provided the Subcommittee with a list of reporter codes, known as Field Reporter 
Numbers (FRNs) or "PREP codes," and it provided a list of reporting officials; however, it 
declined to provide the Subcommittee any document or information in an unclassified setting 
that it believed could be used in combination with other information to discern the identities of 
the authors of specific HIRs. 74 

According to DHS officials, in 2007 and 2008, the department trained state and local 

7S 

personnel, including firefighters and policemen, on how to draft an HIR. "It's true, state and 
local personnel were issued FRNs .... Yes, there are reports in the system [by authors] who are 
not Federal employees, but were trained," said former Reporting Branch chief Keith Jones, who 



Attachment 2: Homeland Intelligence Report Threshold, HIRWG Phase 1 Report and Recommendations, DHS- 
HSGAC-FC-056566. 

71 6/25/2010 "Standard Operating Procedure for Homeland Intelligence Report Production, v. 1.1," DHS-HSGAC- 
FC-056471, at 056498; "Reports Officer Basic Course, Student Guide, Rev 051 1," DHS-HSGAC-FC-0571 18, at 11. 

72 '"For Official Use Only' (FOUO) is the term used within DHS to identify unclassified information of a sensitive 
nature that is not otherwise categorized by statute or regulation." 3/14/201 1 "DHS Sensitive Systems Policy 
Directive 4300A," DHS.gov, https://www.dhs.gov/xlibrarv/assets/foia/mgmt directive 4300a policy v8.pdf . In the 
13 months' worth of reports the Subcommittee reviewed, 36 HIRs were classified, 574 were unclassified. 
73 "Since DHS I&A's adoption of the DIA IIR formatting, dissemination and security standards in 2004, any 
association of an assigned FRN with the name of the corresponding DHS reporter has been considered classified 
information at its inception." Email from DHS to the Subcommittee (7/15/201 1), "Subject: Fusion Centers." PSI- 
DHS-72-000002. 

74 DHS explained that its reporters' identities were a national security secret, because terrorists or criminals could 
seek retribution for being subjects of their reporting. "[Releasing the identities of Reports Officers would expose 
those Officers to retribution from or exploitation by the adversaries that are the subjects of those Officers' reporting, 
causing serious damage to national security." Response from DHS to the Subcommittee (8/1/2012), DHS-HSGAC- 
FC -059275. When asked about the purpose of classifying reporters' identities, DHS I&A Under Secretary Caryn 
Wagner stated, "I don't think we're talking about personal danger, just, why would you need to know?" 
Subcommittee interview of Caryn Wagner (9/16/2012). 

75 Subcommittee interviews of former Senior Reports Officer (3/30/2012) and Mark Collier (3/8/2012). 



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20 



left the position in 2009. "I recall feeling vaguely uneasy about it . . . people I didn't hire writing 
reports," Mr. Jones said. 76 

The department confirmed that DHS "does not explicitly prohibit" non-federal officials 
from filing intelligence reports, and that as recently as 2010, DHS published intelligence reports 

77 

prepared by non-federal officials. However, in a separate statement the department 
acknowledged "it would be inadvisable" to allow non-federal officials to file intelligence reports, 
because DHS "lacks the legal authority to compel State, local, tribal, territorial, and private 
sector entities to abide by" Executive Order 12333, which regulates national intelligence 

78 " 

activities. 

(2) I&A Personnel 

Although DHS has funded fusion centers since it opened its doors in 2003, DHS had few 
intelligence personnel at fusion centers until recently. In 2006, when then-Under Secretary 
Allen's plan was approved, I&A began systematically detailing "Intelligence Officers" (IOs) to 
fusion centers around the country. 79 

The process was gradual - Allen's plan called for the first three dozen IOs to be in place 
by 2009. Reporting intelligence to DHS was just one of an IO' s responsibilities. IOs were also 
liaisons to DHS, arranging for training state and local personnel, helping local fusion center 
personnel get questions answered at DHS, preparing information for briefings to state and local 
officials, and more. 80 

8 1 

In 2008, the Reporting Branch began detailing its own specialists to fusion centers. 
Reporting Branch officials sent to fusion centers are known as Reports Officers (ROs) or Senior 
Reports Officers (SROs), different from IOs primarily because their focus is solely the reporting 
of state and local intelligence back to DHS. As of May 3, 2012, DHS said the Reporting Branch 
has deployed reporting officials to 18 fusion centers around the country. 

IO and RO intelligence collection authorities are restricted by executive order to "overt" 

83 

collection practices, which includes the acquisition of information "from . . . observation, 



Subcommittee interview of Keith Jones (4/2/2012). 

77 DHS response to Subcommittee inquiry (9/21/2012), DHS-HSGAC-FC-059982. 

78 DHS response to Subcommittee inquiry (8/1/2012), DHS-HSGAC-FC-059275. 

79 Subcommittee interview of Robert Riegle (6/1/2012). The first DHS detailee at a fusion center was placed in 
January 2006, to the Los Angeles Joint Regional Intelligence Center, before Allen's plan, which contained a strategy 
for detailing personnel, was approved. Subcommittee interview of Joel Cohen (4/16/2012). 

80 "Position Description, Intelligence Operations Specialist," DHS-HSGAC-FC -058978. 

81 At first the Reporting Branch deployed contract employees provided by federal contractors; they eventually 
replaced them with federal employee Reports Officers. Subcommittee interview of Jonathan Wilham (3/6/2012). 

82 DHS Support to Fusion Centers, as of 5/3/12, PSI-DHS-56-0021. 

83 Executive Order 12333, as amended, http://www.fas.org/irp/offdocs/eo/eo-12333-2008.pdf . 



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government-to-government dialog, elicitation, and from the sharing of data openly acquired .... 

84 

[T]he sources involved normally are aware of the general collection activity [.]" 

While DHS produced a memo explaining I&A's collection authorities and fourteen 
collection categories, DHS officials told the Subcommittee the department has no written 
guidance or training to explain to ROs and IOs what specific intelligence collection practices are 
allowable or prohibited under those authorities. 

Harold Vandover was chief of the I&A Reporting Branch from December 2009 to 
September 201 1. He now helps DHS develop training for its intelligence officers. Mr. 
Vandover told the Subcommittee that I&A does not allow IOs and ROs to recruit people to be 
human intelligence sources for them. They cannot instigate a conversation for the purpose of 
collecting information, according to Mr. Vandover. They are generally limited to reviewing 
documentation such as databases, arrest reports and other law enforcement records. Mr. 
Vandover said they can participate in interviews conducted by state and local officials at their 
fusion center, but cannot request those interviews, and can only ask questions in order to clarify 
information already solicited. 86 

As of May 3, 2012, DHS had detailed Intelligence Officers to 66 state and local fusion 
centers in addition to the 18 Reports Officers. Eleven fusion centers had no DHS I&A personnel 

87 

of any kind on site to identify potentially useful intelligence and report it to headquarters, 
hampering those centers' ability to contribute to the federal counterterrorism mission. 

During the period of review, IOs drafted their own HIRs and submitted them to 
headquarters, where ROs in the Reporting Branch would review the drafts, edit them and 
shepherd them through a multi-office review process. The Reporting Branch was ideally situated 
to spot problems with reporting from IOs. However, the IOs worked for the State and Local 
Program Office (SLPO), a separate entity from the Reporting Branch. This division created a 
cleft in the chain of command, wherein the Reporting Branch was responsible for the quality of 
the reporting, but not the quality of the reporter. When an IO routinely submitted useless or 
inappropriate reporting, the Reporting Branch had no authority to take corrective personnel 
action. It could only notify SLPO officials that the IO was not adhering to department 

88 

guidelines. 



DHS written response to Subcommittee inquiry (8/24/2012) DHS-HSGAC-FC-059584. The Department stated it 
generally follows the definition of "overt collection" from the CIA's Glossary of Intelligence Terms and Definitions 
(June 1989): "The acquisition of intelligence information from public media, observation, government-to- 
government dialogue, elicitation, and from the sharing of data openly acquired; the process may be classified or 
unclassified; the target and host governments as well as the sources involved normally are aware of the general 
collection activity, although the specific acquisition, sites, and processes may be successfully concealed." 

85 Subcommittee interviews of Harold "Skip" Vandover (8/22/2012) and DHS Office of General Counsel 
(8/12/2012); DHS written response, DHS-HSGAC-FC-059275; Memorandum from Charles E. Allen and Matthew 
L. Kronisch to All Employees, Detailees, and Contractors Supporting the Office of Intelligence and Analysis, 
"SUBJECT: Interim Intelligence Oversight Procedures for the Office of Intelligence & Analysis," (4/3/2008) DHS- 
HSGAC-FC-047637. 

86 Subcommittee interview of Harold "Skip" Vandover (3/22/2012). 

87 DHS Support to Fusion Centers (5/3/2012), PSI-DHS-56-0021. 

88 Subcommittee interview of Harold "Skip" Vandover (3/22/2012). 



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(3) Drafting Fusion Center HIRs 

When DHS personnel at a state or local fusion center obtain information that they believe 
might assist the homeland security mission, they draft an intelligence report, known during the 
period of Subcommittee review as a Homeland Intelligence Report (HIR). Until October 201 1, 
reporters filed draft HIRs as Microsoft Word documents and transmitted them to headquarters 
via unclassified email. 90 The Department has since switched to using an intelligence reporting 
system developed by the Defense Department, and sharing drafts via a secure network. 91 

At DHS's Washington, D.C. headquarters, an I&A Reports Officer (RO) received the 
documents when they arrived. He or she reviewed the draft against the source documents to 
ensure everything necessary was present, conducted additional research as warranted, revised the 
draft, and forwarded it to a Senior Reports Officer for review. 

I&A Reports Officers worked their way through the queue of draft HIRs, typically 
reviewing each one in order of when it was received, officials said. According to Reporting 
Branch officials, ROs often had to make extensive edits, including rewriting the entire HIR, 
adding codes and formatting before the document was ready for publication to the intelligence 

93 

community. 

Once the draft was complete, the ROs sent the final, peer-reviewed draft to a Senior 
Reports Officer (SRO), who reviewed the document and its changes. If the SRO approved the 
final draft, the RO placed it in a shared folder for oversight review. 



DHS now calls HIRs Intelligence Information Reports (IIR). In this report, the terms are used interchangeably, 
however HIR primarily refers to reporting during the review period. During the period reviewed by the 
Subcommittee, IOs drafted HIRs. In July 201 1, DHS refined the roles of ROs and IOs, stating that ROs primarily 
draft IIRs, and IOs should pass tips and leads to ROs for drafting into a report. Memorandum from Christopher 
Button and Michael Potts, "Subject: Management of I&A Personnel at State and Major Urban Area Fusion Centers" 
(7/29/201 1), DHS-HSGAC-FC-059289. 

90 Subcommittee interview of Keith Jones (4/12/2012). 

91 Subcommittee interview of Charles Robinson (7/18/2012); DHS response to Subcommittee inquiry (8/30/2012), 
PSI-DHS-67-0001; "Standard Operating Procedure for Homeland Intelligence Report Production, v. 1.1," DHS, 
(6/25/2010) DHS-HSGAC-FC -056477. In the uncommon case of a draft HIR that was classified, it was transmitted 
via the Homeland Security Data Network (HSDN), a Secret-level classified network. Email from DHS to the 
Subcommittee (8/30/2012), PSI-DHS-67-0001. Because DHS classifies its reporters' identities, its procedure 
requiring reporters to email draft reports via unsecure networks may represent improper handling of classified 
information. 

92 6/25/2010 "Standard Operating Procedure for Homeland Intelligence Report Production, v. 1.1," DHS, at DHS- 
HSGAC-FC-056478. 

93 Subcommittee interviews of Senior Reports Officer (3/1/2012), Senior Reports Officer (3/20/2012), and Keith 
Jones (4/2/2012). 



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(4) DHS Enhanced Review of HIRs 

Prior to April 2009, I&A did not systematically send draft HIRs to be reviewed by the 
DHS Office of Privacy and Office for Civil Rights and Civil Liberties. 94 However, in April 2009, 
news outlets reported on a DHS intelligence product which suggested that anti-abortion groups, 
anti-immigration groups, and groups "rejecting federal authority in favor of state or local 
authority" could be considered "rightwing extremist" groups potentially capable of acts of 
terror. 95 Media articles about the intelligence report brought sharp criticism of DHS, particularly 
from conservative groups and civil libertarians. 96 

In response to public outcry over the report, DHS Deputy Secretary Jane Holl Lute 
ordered I&A to ensure certain types of intelligence products were reviewed and approved by 
officials from DHS's Privacy Office (PRIV), Office for Civil Rights and Civil Liberties (CRCL), 
I&A's Office of Intelligence Oversight (170), and the DHS Office of General Counsel (OGC) 
before release. 

Following Ms. Lute's directive, I&A Reporting Branch officials coordinated with these 

no 

four offices, and within weeks they instituted a new procedure. Under the new procedure, after 
receiving a draft nomination from DHS personnel in the field, a Reports Officer at headquarters 
assigned it a tracking number; placed the draft, and any accompanying materials, in a shared 
folder on the DHS electronic network; and alerted officials at the reviewing offices (PRIV, 
CRCL, I/O, OGC) that a new draft nomination was available for review. 99 

Reviewing officials from each office read the material and submitted their comments in 
emails to I&A, advising publication or cancellation, asking questions, or recommending 
alterations to the draft. All four offices reviewed and approved a draft before it was published; 
an objection from any reviewer caused a report's cancellation. 

From 2007 to early 2010, DHS Deputy Under Secretary for Operations James Chaparro 
oversaw much of I&A's operations. Mr. Chaparro had serious concerns about how the enhanced 
multi-office review process was implemented. In his eyes, it was "putting a tremendous 
workload on [the offices] without commensurate resources. You can see exactly what's going to 
happen. It's going to slow the process down." 100 



Both entities are oversight offices located outside of I&A. 

95 "Rightwing Extremism: Current Economic and Political Climate Fueling Resurgence in Radicalization and 
Recruitment" (4/7/2009), DHS-HSGAC-FC-059277. 

96 See, e.g., "Soon, We'll All Be Radicals," ACLU, http://www.aclu.org/blog/national-security-technology-and- 
liberty/soon-well-all-be-radicals (4/16/2009); Transcript of "Hannity," segment "Joe the Plumber at Atlanta Tea 
Party," http://www.foxnews.com/story/0,2933,516835,00.html (4/15/2009). 

97 Email from MGMTExecSec, "Subject: Management Action Directive: Coordination of Intelligence Products" 
(4/17/2009), DHS-HSGAC-FC-047649. 

98 Email from Jonathan Wilham to Timothy Bailey, Ole Broughton, et al, "Subject: Vetting of DHS HIRs" 
(5/5/2009), DHS-HSGAC-FC-047651. 

"Id. 

100 Subcommittee interview of James Chaparro (6/28/2012). 



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As Mr. Chaparro predicted, the new review process, when it met with a steady flow of 
poorly- written, sometimes inappropriate reporting, slowed I&A's intelligence publishing by 
months. "It was horribly inefficient," Ken Hunt, a Privacy Office official involved in the review 
process, told the Subcommittee. "I remember conversations about the inefficiencies." 101 For the 
better part of almost three years - from early 2009 to late 201 1 - DHS reporting was delayed, 

102 

sometimes by months. 

C. Funding State and Local Fusion Centers 

DHS has funded state and local fusion center operations primarily through its Homeland 
Security Grant Program (HSGP), administered by the Federal Emergency Management Agency 
(FEMA). Through the HSGP, FEMA provides roughly $800 million annually to states and 
municipalities for the broad purpose of "building and sustaining national preparedness 
capabilities." 103 

HSGP funds can be used by states and urban areas for items as diverse as body armor, 
respirators, diving fins, mass casualty transport vehicles, reference databases, boats, planes, and 
refrigerators; 104 for training on a wide variety of topics; for preparedness exercises; and for 
special event planning. 105 Recipients can even use HSGP funds for costs like construction, 
physical security upgrades, rent and salaries, in proscribed circumstances. They can also use 
HSGP funds to support a fusion center. 106 

FEMA awards the funds to a designated agency in each state, known in FEMA parlance 
as the State Administrative Agency (SAA). Each year, FEMA determines how much each SAA 



101 Subcommittee interview of Ken Hunt (2/27/2012). 

102 HIRs from fusion centers published in June 2009 were published on average nearly three months after the 
information contained therein had been acquired, the Subcommittee investigation found. The delay persisted 
through April 2010, the end of the period of reporting the Subcommittee reviewed. 

A March 9, 201 1 memorandum suggests that in late 2010 DHS cut the publication lag to an average of 14 days, 
but by the date of the memorandum a second backlog had developed. The backlog likely included - and impacted - 
reporting from DHS components, as well. Memorandum from Harold "Skip" Vandover to Mike Potts, "SUBJECT: 
Reporting Backlog" (3/9/201 1), DHS-HSGAC-FC-059705. 

Documents indicate the backlog persisted through most of 201 1. Email from Harold "Skip" Vandover to 
Donald Torrence, "Subject: RE: UPDATED HIR Triage Definitions" (5/3/2011), DHS-HSGAC-FC-050748 ("I 
intend to monitor the backlog to see how it is coming down before I take more drastic measures"). Email from 
Harold "Skip" Vandover to Jonathan Wilham, et al, "Subject: S&L HIR "Surge" (8/24/201 1), DHS-HSGAC-FC- 
050741 ("As it stands right now, there are over 500 HIRs waiting to be reviewed and published ... we are 
continuing to slip further behind.") 

A November 201 1 document indicates a significant backlog was still present at that time - 307 draft reports 
were waiting for publication, 267 of which were more than 10 days old. "DHS Reporting Branch Weekly 
Passdown" (11/10/11), DHS-HSGAC-FC-056589. 

103 DHS website, "Fiscal Year (FY) 2012 Homeland Security Grant Program (HSGP) Frequently Asked Questions 
(FAQs)," http://www.fema.gov/pdf/government/grant/AFG.pdf . Before 2008, DHS also funded fusion centers 
through its Law Enforcement Terrorism Prevention Program (LETPP), which no longer exists as a separate 
program. 

104 FEMA Preparedness Grants Authorized Equipment List, https://www.rkb. us/mel.cfm?subtypeid=549 , accessed 
9/24/2012. 

105 FEMA Homeland Security Grant Program, Program Guidance and Application Kits, 2007- 201 1. 



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will receive in HSGP funds according to a risk-based formula set out in statute. It informs 
each state of the amount it will receive. Then, the S AAs prepare and submit an application to 
FEMA that identifies and justifies the broad areas in which they plan to spend the grant funds 
FEMA has already committed to providing them. 

States determine how much of their FEMA preparedness grant funding they will direct to 
fusion center projects. As explained below, DHS does not track the exact amount each state and 
municipal recipient directs to each fusion center in their jurisdiction. 

After FEMA reviews and approves these applications, also known as "investment 
justifications" (Us), it disburses grant funds to the states. Each SAA then distributes portions of 
the funds to specific projects, including those meant to support fusion centers, through the state 
and local agencies responsible for implementing those projects. Once an SAA allocates grant 
funds to an individual project, FEMA expects that SAA to compile progress reports on the 
project. Those reports, known as the Biannual Strategy Implementation Reports (BSIRs), are 

108 

filed every six months. They are intended to track the expenditure of grant funds. BSIRs are 
not used to conduct program oversight. BSIRs reviewed by the Subcommittee provided only a 
high level overview of grantees' spending. 



1U 'Implementing Recommendations of the 9/11 Commission Act of 2007, P. L. No. 110-53, § 2004 (e) (2007), 
codified at 6 U.S.C. § 605 (e). 

108 DHS, Homeland Security Grant Program, Program Guidance and Application Kit, Fiscal Years 2007-2009. 



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IV. DHS SUPPORT FOR AND INVOLVEMENT IN STATE AND LOCAL 
FUSION CENTERS DOES NOT GENERATE TIMELY, USEFUL 
INTELLIGENCE FOR FEDERAL COUNTERTERRORISM EFFORTS 



• Reporting from fusion centers was often flawed, and unrelated to terrorism. 

• Some reports had "nothing of value." 

• If published, some draft reporting could have violated the Privacy Act. 

• Most fusion center reporting related to drug smuggling, alien smuggling or other criminal activity. 

• Terrorism-related reporting was often outdated, duplicative and uninformative. 

• DHS intelligence reporting officials who repeatedly violated guidelines faced no sanction. 

• DHS did not sufficiently train its fusion center detailees to legally and effectively collect and report 
intelligence. 

• Short-staffing and reliance on contract employees hampered reporting efforts. 

• Reporting officials aren't evaluated on the quality of their reporting. 

• A hastily-implemented and poorly coordinated review process delayed reporting by months. 

• Retaining inappropriate records is contrary to DHS policies and the Privacy Act. 

• Problems with DHS reporting are acknowledged, but unresolved. 



A. Overview 

"Fusion centers are and will be a critical part of our nation's homeland security 
capabilities. I intend to make them a top priority for this department to support them, build them, 
improve them and work with them," DHS Secretary Janet Napolitano said in a speech before the 
Council on Foreign Relations in July 2009. 109 

At a March 4, 2010 Congressional hearing, DHS Undersecretary for Intelligence and 
Analysis Caryn Wagner praised fusion centers as "the linchpin of the evolving homeland 
security enterprise," "a proven and invaluable tool," and "a major force multiplier in the 
counterterrorism enterprise." 110 

Central, effective, vital to the federal counterterrorism mission: that was how DHS 
officials have envisioned and explained fusion centers' importance to the Department and their 
efforts to protect the country from another terrorist attack. 

In 2006, the Department's intelligence chief penned a master plan for how DHS should 
use fusion centers to contribute to the U.S. intelligence community. "Harnessing domestic 
information is the unique DHS contribution to the national-level mission to protect the 
Homeland," wrote Charles Allen, then Under Secretary for Intelligence and Analysis, in the 
Department's strategy for systematic engagement with fusion centers. "We need the capability 



Remarks by Secretary Napolitano at the Council on Foreign Relations (7/29/2009), 
http://www.dhs.gov/ynews/speeches/sp 124889 1649 195. shtm . 

110 Testimony of Caryn Wagner before the House Subcommittee on Homeland Security of the Committee on 
Appropriations, "Homeland Security Department Intelligence Programs and State and Local Fusion Centers," 
(3/4/2010). 



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to routinely harvest information and finished intelligence in a timely manner from State and 
Local sources." 111 

Congress and the White House handed DHS the responsibility and authority to share 
terrorism-related information with state, local and tribal governments; in 2007, both Congress 
and the White House made clear they agreed with Mr. Allen's plan that such information- sharing 
should happen via state and local fusion centers. 

But five years and hundreds of millions of dollars later, DHS has struggled to turn this 
vision into a reality. Even as DHS officials and others have used public appearances to 
emphasize fusion centers' alleged contributions to counterterrorism intelligence efforts, the facts 
have not supported the weight of their claims. 

The Subcommittee's two-year investigation found that DHS's support of fusion centers 
has yielded little, if any, benefit to federal counterterrorism intelligence efforts. After reviewing 
13 months' worth of reporting originating from fusion centers from 2009 to 2010, the 
Subcommittee investigation found that DHS-assigned detailees to the centers forwarded 
"intelligence" of uneven quality - oftentimes shoddy, rarely timely, sometimes endangering 
citizens' civil liberties and Privacy Act protections, occasionally taken from already-published 
public sources, and more often than not unrelated to terrorism. 

While there were times when he was proud of the quality of reporting coming out of 
DHS's Reporting Branch, former branch chief Harold "Skip" Vandover told the Subcommittee, 

112 

"there were times when it was, 'what a bunch of crap is coming through.'" 

"A lot of [the reporting] was predominantly useless information," one former Senior 
Reports Officer, who worked in the Reporting Branch from 2006 to 2010, told the 

113 

Subcommittee. "You had a lot of data clogging the system with no value." ~ Overall, the 
former official estimated 85 percent of reports coming out of the Reporting Branch were "not 
beneficial" to any entity, from federal intelligence agencies to state and local fusion centers. 114 

Of the 610 reports reviewed, the Subcommittee investigation identified dozens of 
problematic or useless HIRs - dated, irrelevant, potentially violating civil liberties protections, 
even drawn from older public accounts. 

The DHS officials who filed useless, problematic or even potentially illegal reports 
generally faced no sanction for their actions, according to documents and interviews. 
Supervisors spoke with them about their errors, but those problems were not noted on the 
reporting officials' annual performance reviews, and did not influence managers' decisions about 



111 Memorandum from Charles E. Allen, "State and Local Fusion Center Plan" (3/16/2006), at 2, DHS-HSGAC-FC- 
004031. 

112 Subcommittee interview of Harold "Skip" Vandover (3/22/2012). 

113 Subcommittee interview of former Senior Reports Officer (3/21/2012). 

114 Id. Others also noted the frequency of substandard reporting. "It's quite apparent when you look at some of the 
reporting that the HUMINT [human intelligence] skills aren't there," said one former Senior Reports Officer, who 
reviewed and edited HIRs from fusion centers. Subcommittee interview of Senior Reports Officer (3/1/2012). 



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their salary raises, bonuses or career advancement, DHS officials told the Subcommittee. In fact, 
the Subcommittee investigation was able to identify only one case in which an official with a 
history of serious reporting issues faced any consequences for his mistakes - he was required to 
attend an extra week of reporting training. 

The Subcommittee investigation also learned that DHS did not adequately train personnel 
it sent out to perform the extremely sensitive task of reporting information about U.S. persons - a 
job fraught with the possibility of running afoul of Privacy Act protections of individuals' rights 
to associate, worship, speak, and protest without being spied on by their own government. 

In May 2009, DHS Deputy Secretary Jane Holl Lute required certain I&A reporting to be 
examined and approved by a thorough multi-office review process which required signoff from 
the department's Privacy and Civil Liberties experts. Following that policy, I&A officials 
submitted all DHS reporting from state and local fusion centers to the enhanced review 
process. 115 While onerous, the enhanced review compensated for the difficulty DHS intelligence 
reporters had in consistently adhering to departmental guidelines and federal law, and the 
difficulties DHS intelligence reviewers had in enforcing guidelines and law in the reporting 
process. Unfortunately, the offices involved in the review process also radically slowed down 
the reporting process. A lack of oversight from the highest levels of DHS allowed those delays 
to continue, slowing the publication and distribution of intelligence reports by several months, on 
average. Those delays affected the reporting process for the better part of almost three years. 

The problems created by poor reporting and an onerous review process were 
compounded by insufficient staffing at the Reporting Branch, the DHS intelligence unit 
responsible for reviewing and finalizing drafts for publication. DHS officials said they relied on 
contract employees to perform these sensitive tasks, some of whom they believed to be under- 
trained or poor performers. And for most of its existence, the office lacked basic documentation 
outlining its policies and practices, such as Standard Operating Procedures or a Concept of 
Operations, which should have clearly defined functions, roles and responsibilities in the 
reporting process. 1 16 

Moreover, DHS told the Subcommittee that until 2010 it could not routinely receive 
intelligence reporting from most fusion centers. DHS indicated that its procedures required all 
"raw" intelligence reporting originating from fusion centers to be filed with DHS by a DHS 

117 

official on-site at the fusion center. In 2009, DHS reported it had placed intelligence officers 

118 

at only 32 of the 70 fusion centers which it claimed operated around the country. That meant 
38 of the fusion centers had no DHS official and, thus, purportedly no way to file intelligence 
reports with DHS. Despite directing federal funding to these 38 centers, DHS had not detailed 



115 Email correspondence from MGMTExecSec (4/17/2009), DHS-HSGAC-FC-047649; Email correspondence 
from Jonathan Wilham, "Subj: Vetting of DHS HIRs" (5/5/2009), DHS-HSGAC-FC-047651. 

116 See 3/2011 Homeland Intelligence Report Working Group (HIRWG) Phase 1 Report and Recommendations, 
November 2010, DHS-HSGAC-FC-050770. 

117 Some DHS officials told the Subcommittee that from 2006 to as recently as 2010, DHS allowed state and local 
officials to file reports; in fact, DHS officials trained them to do so, and accepted reporting from them. For more on 
this topic, see the Background section. 

118 "State and Local Fusion Center Program: Quarterly Report, Fiscal Year 2009 Report to Congress, First Quarter," 
(8/4/2009), at 2. 



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intelligence personnel to those centers, rendering them functionally disconnected from DHS's 
intelligence reporting process. 

Undersecretary Wagner disagreed that those fusion centers were unable to share 
intelligence with DHS in her interview with the Subcommittee. If a fusion center lacked an 10 
or RO, "they can pick up the phone or send us an email," she said. Asked why ROs and IOs 
were necessary if telephones and email were sufficient to share information, Ms. Wagner said, "I 
wouldn't say these are sufficient." 119 

Since the period of review by the Subcommittee investigation, DHS told the 
Subcommittee it had expanded the number of detailees assigned to fusion centers. By May 

120 

2012, DHS claimed it had placed intelligence officials at 66 fusion centers around the country. 

The Subcommittee investigation found that senior DHS officials knew about the 
problems with the Department's fusion center intelligence reporting efforts, and with its broader 
intelligence reporting program. Yet the problems went unaddressed for months - sometimes 
years - and were largely unknown outside of the Department. Officials chose not to inform 
Congress or the public of the seriousness of these problems during that time, nor were they 
uncovered by any outside review until this investigation. 

By the end of 2009, DHS I&A officials, led by Deputy Under Secretary for Operations 
James Chaparro, had identified a handful of what Mr. Chaparro termed "systemic problems" 

121 

contributing to the extreme delays. Among them: Reports officers "do not always apply 

122 

sufficient scrutiny" to the information they turn into an HIR, particularly from fusion centers. 
DHS officials involved in reporting intelligence needed more training, they said. Also, the 

12^ 

Reporting Branch was understaffed. 

Mr. Chaparro left I&A on February 13, 2010, just two days after Ms. Wagner was 

124 

confirmed as Undersecretary. Ms. Wagner told the Subcommittee that officials did not 
immediately share with her the conclusions of Mr. Chaparro and others, although in time she 
received briefings which highlighted the backlog in raw intelligence production. 



119 Subcommittee interview of Caryn Wagner (9/16/2012). 

120 DHS Support to Fusion Centers (5/3/2012), PSI-DHS-56-0021. 

121 Memorandum from James Chaparro to Bart Johnson, "Homeland Intelligence Reports," (1/7/2010), DHS- 
HSGAC-FC -050742. 



Mr. Chaparro left I&A on February 13, 2010. Subcommittee interview of James Chaparro (6/28/2012). The 
Senate confirmed Ms. Wagner to Undersecretary for I&A on February 11, 2010. Biography of Caryn Wagner, DHS 
web site, http://www.dhs.gov/caryn-wagner , accessed 9/18/2012. 

125 Subcommittee interview of Caryn Wagner (9/16/2012). Ms. Wagner said she was not only concerned with the 
quality of reporting DHS received from fusion centers, but the quality of reporting DHS pushed out to the centers. 
"We had to improve the information flowing out," she said. "We weren't providing very good products to the 
fusion centers, either." Subcommittee interview of Caryn Wagner (9/16/2012). In 2010, the DHS Inspector General 
found that DHS reporting to fusion centers was often months old. "As a result, the information contained in the 
HIRs may no longer be relevant by the time it reaches the fusion centers," the IG reported. DHS Office of Inspector 



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30 



According to one person interviewed by the Subcommittee, DHS officials who briefed 
Ms. Wagner discussed how her division was taking months to publish "raw" intelligence reports 
from fusion centers as well as from components of DHS like the Transportation Security 
Administration (TSA), U.S. Immigration and Customs Enforcement (ICE) and U.S. Customs and 
Border Protection (CBP). 126 "I said, that's not acceptable," Ms. Wagner recalled. She requested 

127 

a study on how her office received and published raw intelligence. 

Amy Kardell, a Ph.D. in Organizational Sociology, oversaw I&A's efforts to coordinate 
intelligence activities among the Department's many components. Ms. Kardell led the effort to 

128 

examine the problems with I&A's reporting and publication process, and propose solutions. 
While it proved to be useful, the new study spent several months diagnosing some of the same 
problems which had already been identified by Mr. Chapparo and others, particularly the 
inadequacy of I&A's reports officer training. 129 

In May 2010, at Ms. Wagner's request, Ms. Kardell created the HIR Working Group 
(HIRWG). The group described the problems it would tackle: 

Currently the HIR process from submission to dissemination is perceived as requiring 
excessive time to disseminate a HIR; suffering from implementation inconsistency from 
one Component to another; having little perceived value (clearance times render items 
obsolete) to include understanding the customer sets; dissemination responsibilities; and 

1^0 

issues involving ingest to the IC [intelligence community]. * 

The working group's review took six months, and its findings were sharp. Ms. Kardell 
told the Subcommittee that when she examined the Reporting Branch, she found it "in a state of 
disrepair." 131 "The house was not in order," as she described it to the Subcommittee, contrasting 
the branch unfavorably to a well-ordered intelligence operation. "It was kind of like a MASH 

132 

unit," she said. "[They] used a lot of practices you wouldn't use in a hospital." 

The HIR Working Group found the Reporting Branch lacked basic documentation like 
Standard Operating Procedures, clear reporting thresholds, policy management, and a Concept of 



General, Report, "Information Sharing With Fusion Centers Has Improved, but Information System Challenges 
Remain," Report 1 1-04, http://www.oig.dhs.gov/assets/Mgmt/OIG 11-04 Octl0.pdf) . 

It is unclear how much the process has improved since then. GAO reported in September 2012 that fusion 
centers said DHS reporting "was not always timely," and that "sometimes . . . I&A information is already available 
through media outlets and other information sources." Government Accountability Office, Report, 
"INFORMATION SHARING: DHS Has Demonstrated Leadership and Progress, but Additional Actions Could 
Help Sustain and Strengthen Efforts," Report GAO- 12-809, http://www.gao.gov/assets/650/648475.pdf) . 

126 Subcommittee interview of Amy Kardell (6/5/2012). 

127 Subcommittee interviews of Amy Kardell (6/5/2012) and Caryn Wagner (9/16/2012). 

128 Subcommittee interview of Amy Kardell (6/5/2012). 

129 Poor reporting training and its consequences had been flagged in an email conversation between I&A officials in 
April 2009, several months before Mr. Chaparro's memorandum. Email from Barbara Alexander to James Chaparro, 
et al., "Subject: Open Source Requirements," DHS-HSGAC-FC-059585. 

130 "Terms of Reference for HSIC HIR Working Group," (1 1/2010) DHS-HSGAC-FC -056566. 

131 Subcommittee interview of Amy Kardell (6/5/2012). 



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31 



Operations. ~ DHS officials who collected and reported information on U.S. persons were not 
required to meet any standard of competence, nor required to pass any test or certification. 134 

While problematic and useless reporting was common, Ms. Kardell told the 
Subcommittee she discovered the unit had never conducted an audit or review to see why 
problems were so frequent, nor did it maintain records which would allow others to properly 
oversee the program. Ms. Kardell' s team also found that many believed the review process 

135 

could be "arbitrary" and "inconsistent." 

Ms. Kardell' s review was completed in November 2010. In March 201 1, five months 
later, Undersecretary Wagner directed her staff to act on the group's recommendations. 136 As of 
September 2012, more than two years after the initial study was completed, DHS had yet to fully 

1 37 

implement several of the review's key recommendations. 

B. Reporting from Fusion Centers was Often Flawed, 
Unrelated to Terrorism 

As noted, the Subcommittee investigation reviewed every raw DHS intelligence report 
drafted on information from state and local fusion centers from April 1, 2009, to April 30, 2010. 
The period corresponds to the first year I&A implemented its multi-office review process. 

The Subcommittee investigation counted that, during that period, DHS intelligence 

138 

officers at state and local fusion centers around the country filed 610 draft reports to DHS 

139 

headquarters for dissemination. ~ During that period, the draft HIRs came from fusion centers in 
just 31 states; fusion centers in 19 states generated no reports at all. In addition, the vast majority 
of the 574 unclassified draft reports filed came from DHS detailees assigned to fusion centers in 
just three states - Texas (186 drafts), California (141) and Arizona (89). Meanwhile, fusion 
centers in most other states produced little to no reporting. 140 



The Reporting Branch assembled a document of Standard Operating Procedures in June 2010, during the period 
of the HIRWG review. It does not appear to reflect current practices. 

134 "Homeland Intelligence Report Working Group (HIRWG) Phase 1 Report and Recommendations," (11/2010) 
DHS-HSGAC-FC-050770. 

135 Id. 

136 While Undersecretary Wagner made reference to the study and its recommendations in public testimony, she said 
her office did not share the report with Congress until the Subcommittee requested a copy as part of its investigation. 
Subcommittee interview of Caryn Wagner (9/16/2012). 

137 Subcommittee interview of Caryn Wagner (9/16/2012); DHS response to Subcommittee inquiry, DHS-HSGAC- 
FC-059968. 

138 Of those, 574 were unclassified, 36 were classified. 

139 DHS disseminated HIRs to other fusion centers, although I&A personnel understood their primary consumers to 
be the federal intelligence community - other DHS components, intelligence agencies, even the White House 
Situation Room. See, "Standard Operating Procedure for Homeland Intelligence Report Production, v. 1.1," 
(6/2010) at 6, DHS-HSGAC-FC-056483. Conformation. . . may be drafted and published as an HIR if it contains 
information of intelligence value to members of the IC") 

140 This imbalance in reporting did not go unnoticed within the DHS Reporting Branch. Keith Jones, who headed the 
branch for part of 2009 and 2010, estimated that most reporting from fusion centers during his time came from a half 
dozen DHS officers. "In a couple cases there was a lot going on," he told the Subcommittee. "In a couple of others 



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Of the 574 unclassified draft reports field officers filed, the Subcommittee investigation 
counted 188 marked by DHS reviewers as cancelled, nearly a third. Reviewers recommending 
cancellation of drafts faulted the reports for lacking any useful information, for running afoul of 
departmental guidelines meant to guard against civil liberties or Privacy Act protections, or for 
having no connection to any of DHS's many missions, among other reasons. 

Of the 386 unclassified reports published, the Subcommittee investigation counted only 
94 which related in some way to potential terrorist activity, or the activities of a known or 
suspected terrorist. Of those 94 reports, most were published months after they were received; 
more than a quarter appeared to duplicate a faster intelligence-sharing process administered by 
the FBI; and some were based on information drawn from publicly available websites or dated 
public reports. In one case, DHS intelligence officials appear to have published a report which 
drew from or repeated information in a Department of Justice press release published months 
earlier. In short, the utility of many of the 94 terrorism-related reports was questionable. 

The Subcommittee investigation found that fusion center reporting that attempted to 
share terrorism-related information was more likely to be cancelled than reporting on other 
topics. While the overall cancellation rate of draft intelligence reports from fusion centers during 
the period of review was around 30 percent, the cancellation rate for reports which alleged or 
indicated a possible connection to terrorism had a higher cancellation rate - over 45 percent. 141 

(1) Some Reports Had "Nothing of Value" 

At DHS headquarters, Reports Officers who reviewed the draft HIRs from fusion centers 
before they were to be published found many of the reports useless. The officers shared those 
sentiments in the written comments they made recommending that particular draft HIR reports 
be cancelled. At times they expressed amazement at the poor quality of reporting. For instance, 
one draft intelligence report alerted would-be readers that a certain model of automobile had 
folding rear seats that provided access to the trunk without leaving the car, and opined the feature 
could be useful to human traffickers. One reviewer wrote, "This is common knowledge." 142 A 
folding rear seat "is featured on MANY different makes and models of vehicles," the reviewer 
commented. "There is nothing of any intelligence value in this report[.]" The report was never 
published. 143 

"I see nothing to be gained by releasing this report," one reviewer commented on several 
other intelligence drafts that were eventually cancelled. One reported an arrest for cocaine 
possession; another relayed information about the bust of a methamphetamine lab run by a 
person who had claimed affiliation with a white supremacist group; and one was on an Afghan- 



they were looking for stuff [to report] so they could wave their flag." Subcommittee interview of Keith Jones 
(4/2/2012). 

141 Undersecretary Wagner said she believed "[HIRs] are not the premier process of reporting counterterrorism from 
fusion centers." Asked what was, Ms. Wagner said, "daily ongoing collaborations," which she defined as "phone 
calls" and "secure video teleconferences." Subcommittee interview of Caryn Wagner (9/16/2012). 

142 "Human smuggling vehicle concealment method," draft HIR report, cancelled 7/6/09, DHS-HSGAC-FC-17078. 



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33 



born former U.S. Army translator who had been a passenger in a car involved in an accident. 
Reviewers could see no apparent link to a homeland security mission for any of the reports. 

"This report does not provide the who, what, when, where, how," went a comment on a 
different draft report that was cancelled. 145 That particular draft HIR, dated July 2009, 
chronicled the experience of a Texas sheriff's deputy who encountered a man standing beneath a 
bridge near the U.S. -Mexico border. When the deputy spoke with the man, the draft said the 
man identified himself as a former gang member. After they spoke, the man left, according to 
the draft report. 146 

The sheriff's deputy saw "numerous human footprints nearby," the draft stated. A 
records check on the man turned up numerous arrests, including some for drug smuggling, the 
draft noted. There was no record of any activity by the man's alleged former gang in the area, 
according to the draft, and the officer saw no drugs at the site underneath the bridge. 
Nevertheless, the sheriff's department believed the man "may have been awaiting a drug 
shipment at the time of the encounter," the draft stated. 147 

"There is no conclusive, reportable information in this HIR," another commenter wrote 
on the draft. "I don't feel this meets our reporting threshold or provides any benefit to the IC 
[Intelligence Community]." In February 2010, seven months after the draft was filed, DHS I&A 
cancelled it. 

"This is open-source information," a DHS headquarters reviewer wrote to advocate 
cancelling another draft report, using the intelligence community's term for public, non- 
classified information such as news reports. The draft relayed a Mexican news report that a 
Mexican ambulance service allegedly declined to transport a Mexican victim of drug violence in 
Mexico. Another reviewer concurred, "This is open source news information and lacks any 
valuable information for the IC." 

"[D]oes not contain any actual intelligence," went a comment on yet another draft. That 
draft recounted the experience of two state wildlife officials who spotted a pair of men in a bass 
boat "operating suspiciously" in a body of water on the U.S. -Mexico border. 149 "The bass boat, 
operating within Mexican waters, was travelling at a high rate of speed towards the international 
boundary," the draft stated. "After the wardens responded by maneuvering their . . . boat in the 



144 "Narcotics and Currency Smuggler Arrested ..." draft HIR report, cancelled 4/30/2010, DHS-HSGAC-FC- 
16967; "Police Discover Meth Lab Operated by Member of White Supremacist Group," draft HIR report, cancelled 
4/23/2010, DHS-HSGAC-16971; "Woman Under Investigation. . . Relocates ... to Work on Military Base " draft 
HIR report, cancelled 4/30/2010, DHS-HSGAC- 16975. When citing and quoting cancelled reporting in this report, 
the Subcommittee investigation has removed specific identifying details of individuals wherever possible, including 
names and locations, and represented those omissions with ellipses and/or bracketed text. 

145 "Possible . . . Gang Smuggling Activity Interrupted ..." draft HIR, 7/6/2009, DHS-HSGAC-FC-017130. 
146 Id. 

147 Id. 

148 'Possible Refusal by Mexican Ambulance Services of Transporting Victims of Drug Trafficking Organizations 
(DTOs) to Mexican Hospitals," draft HIR, cancelled 2/18/2010, INT-3135-09, DHS-HSGAC-FC-017279. 

149 "Possible Drug Smuggling Activity. . ." draft HIR, 2/16/2010, DHS -HSGAC-FC-0 17375. 



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direction of the international boundary to investigate, the bass boat stopped abruptly just short of 
the boundary and the two occupants began fishing." 150 

When the wardens drove their boat closer, "the two individuals avoided eye contact, 
started their engine, and maneuvered the bass boat approximately 50 yards further away from the 
international border." A comment by the draft's author stated, "it is unusual to fish at that 
location based on the depth of the reservoir. Additionally, there were high winds and choppy 
waters at that time." The commenter included the observation that the suspicious boat "was 
riding low in the water, as if it were laden with cargo." 151 

"The fact that some guys were hanging out in a boat where people normally do not fish 
MIGHT be an indicator of something abnormal, but does not reach the threshold of something 
that we should be reporting," one reviewer stated. "I . . . think that this should never have been 
nominated for production, nor passed through three reviews." 

"I am actually stunned this report got as far as it did," went a comment from a reviewer 
asking to cancel another draft report, about local police arresting a foreigner with an expired visa 
and a record in the Terrorist Identities Datamart Environment (TIDE), a U.S. government 
database it calls its central repository of "known or appropriately suspected" terrorist 

153 

identities. The foreigner was accused of shoplifting. 

"The subject of the report is a TIDE match. Okay, good start. But the entire total 
knowledge about the subject ... is that he tried to steal a pair of shoes from Nieman Marcus. 
Everything else in the report is [commentary] ... I have no idea what value this would be adding 
to the IC [Intelligence Community]." 154 

"I actually am surprised that nobody recommended this for cancellation already," a senior 
reports officer wrote on another draft that was eventually cancelled. That draft reported 
information about an individual with a record in the TIDE database who was arrested for 
speeding while driving his brother's van. "As I see it, we have a report about a TIDE match that 
borrowed a van. That is it. From that I can see no reason why the IC would be interested," the 
senior officer wrote. 155 



152 Id. 

153 TIDE'S custodian, the National Counterterrorism Center (NCTC), defines it as containing "identities of 
individuals known or appropriately suspected to be or have been involved in activities constituting, in preparation 
for, in aid of, or related to terrorism, with the exception of purely domestic terrorism information." TIDE Fact Sheet, 
NCTC.gov, http://www.nctc.gov/docs/Tide Fact Sheet.pdf . 

154 "TERRORISM WATCHLIST: [State] Law Enforcement Officials (LEOs) Arrest an Overstay with Terrorist 
Related Records," draft HIR, cancelled 2/18/2010, DHS-HSGAC-FC-16692. 

155 "TERRORISM WATCHLIST - Encounter with a Jordanian-born U.S. Citizen with Terrorist Related Records," 
INT-26 1 1 -09, DHS-HSG AC-FC-0 1 6740. 



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While reporting information on an individual who is listed in the TIDE database sounds 
significant, the Subcommittee found that DHS officials tended to be skeptical about the value of 
such reporting, because of concerns about the quality of data contained in TIDE. 156 

(2) If Published, Some Draft Reporting Could 
Have Violated the Privacy Act 

Reporting information of little or no intelligence value may have been the most benign 
type of failure by DHS intelligence officers reporting from fusion centers. During the 13-month 
period of reporting the Subcommittee reviewed, DHS officials also nixed 40 reports filed by 
DHS personnel at fusion centers after reviewers raised concerns the documents potentially 
endangered the civil liberties or legal privacy protections of the U.S. persons they mentioned. 

The Constitutional obligations of I&A reports officers and officials at state and local 
fusion centers were summarized by the Office of General Counsel in a July 2008 memorandum 
DHS provided to the Subcommittee. "You are prohibited from collecting or maintaining 
information on U.S. persons solely for the purpose of monitoring activities protected by the U.S. 
Constitution, such as the First Amendment protected freedoms of religion, speech, press, and 
peaceful assembly and protest," the memorandum stated. 157 

It continued, "[T]his does not mean you may never maintain or collect information with 
some connection to constitutionally protected activities; but the information regarding the 



" Although NCTC describes its TIDE database as holding information on the identities of known and suspected 
terrorists, DHS officials - who interacted with TIDE data on a daily basis, as they reviewed reporting not only from 
state and local law enforcement encounters but from encounters by DHS components - said they found otherwise. 
"Not everything in TIDE is KST," DHS privacy official Ken Hunt told the Subcommittee, using a shorthand term 
for "known or suspected terrorist." 

"Would you buy a Ford?" one DHS Senior Reports Officer asked the Subcommittee staff during an interview, 
when he was asked how serious it was for someone to be a match to a TIDE record. "Ford Motor Company has a 
TIDE record." 

Ole Broughton headed Intelligence Oversight at I&A from September 2007 to January 2012. In an interview 
with the Subcommittee, Mr. Broughton expressed the concern DHS intelligence officials felt working with TIDE 
data. In one instance, Mr. Broughton recalled he "saw an individual's two-year-old son [identified] in an HIR. He 
had a TIDE record." Mr. Broughton believed part of the problem was that intelligence officials had routinely put 
information on "associates" of known or suspected terrorists into TIDE, without determining that that person would 
qualify as a known or suspected terrorist. "We had a lot of discussion regarding 'associates' in TIDE," Mr. 
Broughton said. 

Mark Collier, who served as a Senior Reports Officer and briefly as chief of the Reporting Branch, recalled 
another case. An HIR was drafted concerning an incident with a TIDE match, but the TIDE record was based on an 
FBI inquiry. Later on the FBI ended its inquiry and cleared the individual of any connection to terrorism - but 
because DHS had filed an HIR on the person, the individual's record was kept active in TIDE. Subcommittee 
interviews of Ken Hunt (2/27/2012), former Senior Reports Officer (3/1/2012), Mark Collier (3/8/2012), and Ole 
Broughton (4/18/2012). 

157 Memorandum from Matthew L. Kronisch to I&A Reports Officers and Fusion Center Representatives, "Subject: 
Roles & Functions" (7/29/2008), DHS-HSGAC-FC-047644. 



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36 



protected activity may only be incidental to the authorized purpose for which you collected or 

158 

maintained the information." 

The inappropriate reporting appears to have been a regular problem. An April 2009 
email from an alarmed senior I&A official stated: "[State and Local Fusion Center officials] are 
collecting open-source intelligence (OSINT) on U.S. persons (USPER), without proper vetting, 
and improperly reporting this information through homeland information reporting (HIR) 
channels," wrote Barbara Alexander, then director of the Collection and Requirements Division, 
which oversaw HIR reporting. "The improper reporting of this information through HIR 
channels is likely a result of a lack of training on proper collection and reporting procedures . . . 
they are inadvertently causing problems." 159 In an interview with the Subcommittee, Ms. 
Alexander said she recalled being told the Reporting Branch was "flooded" with inappropriate 
reporting. "A lot of information was coming in inappropriately," she remembered. "The 
information was not reportable." 160 

Two years later, in 201 1, Margo Schlanger, then the director of DHS's Office for Civil 
Rights and Civil Liberties (CR/CL), gave a training presentation based on the "main issues 
coming up" for her office as it reviewed I&A's reporting. 161 

Ms. Schlanger' s presentation, a copy of which DHS provided to the Subcommittee, 
indicated that areas in which DHS intelligence reporters had overstepped legal boundaries 
included: Reporting on First Amendment-protected activities lacking a nexus to violence or 
criminality; reporting on or improperly characterizing political, religious or ideological speech 
that is not explicitly violent or criminal; and attributing to an entire group the violent or criminal 
acts of one or a limited number of the group's members. 162 

Examples of those errors were present in the Subcommittee's review of HIRs drafted by 
DHS officials at fusion centers. To the credit of officials participating in the review process, 
these reports were for the most part cancelled before publication. 163 However, these reports 
should not have been drafted at all. 

One draft reported on a list of reading suggestions by a Muslim community group, "Ten 
Book Recommendations for Every Muslim." The report noted that four of the titles were 



Memorandum from Matthew L. Kronisch to I&A Reports Officers and Fusion Center Representatives, "Subject: 
Roles & Functions" (7/29/2008), DHS-HSGAC-FC-047644. 

159 Email from Barbara Alexander to James Chaparro, et al., "Subject: Open Source Requirements" (4/1/2009) DHS- 
HSGAC-FC-059585. 

160 Subcommittee interview of Barbara Alexander (6/22/2012). 

161 Subcommittee interview of Margo Schlanger (5/22/2012). 

162 Principles for Respecting Civil Rights and Civil Liberties in Intelligence Products, Margo Schlanger (3/30/201 1), 
DHS-HSGAC-FC-056639. 

163 With the assistance of a former DHS Civil Rights and Civil Liberties official, the Subcommittee investigation 
identified two published reports from the period of review which may have included inappropriate information on 
identified individuals. Subcommittee interview of Timothy Skinner (3/14/2012); DHS-HSGAC-FC-013331, DHS- 
HSGAC-FC-14519. 



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37 



authored by individuals with records in a U.S. intelligence counterterrorism database, the 
Terrorist Identities Datamart Environment (TIDE). 164 

"We cannot report on books and other writings of TIDE matches simply because they are 
TIDE matches," wrote a CR/CL reviewer on that draft. "The writings themselves are protected 
by the First Amendment unless you can establish that something in the writing indicates planning 
or advocates violent or other criminal activity." 165 The report was not published. 166 

One draft HIR that CR/CL opposed publishing reported on a leaflet prepared by a chapter 
of the Mongols Motorcycle Club, a California-based biker gang. The organization, which has 
claimed it is persecuted by overly aggressive law enforcement, saw their notoriety boosted in 
2008, when a federal investigation into many of its members culminated in the arrest and 
conviction of dozens of Mongols for crimes including murder, attempted murder, drug 
trafficking, money laundering, and racketeering. 167 

At first blush, the activities of this group would seem significant. The subject of the DHS 
intelligence official's report, however, focused not on their illegal behavior, but on a leaflet the 
club produced entitled, "Checklist for the Club Members Who Are Stopped." The document did 
not mention any illegal activities. To the contrary, the checklist directed members, if pulled over 
by police, to: 

Be "as courteous as possible"; 

Try to pull over in a lighted or busy area - "this can provide 
witnesses to any harassment"; 
"always carry a disposable camera"; 

document the "date, time and which type cop (police or sheriff) is 
harassing you," including badge number, as well as "all 
threats/comments about this being their town, they will run you 
out, etc." 

- "STAY IN CONTROL OF YOUR EMOTIONS - Now is not the 
time to have problems in bars and public places. Watch each 
other[']s backs and help one another with this"; 
"Clean up your vehicle - make sure it is completely legal - 
current registration, all lights working - even a license plate light 
being out ... is enough to have them pull you over"; 
"If possible, have a designated driver who will be alcohol and 
drug free. If not possible, taxis cost less than an attorney." 168 



For more on TIDE, see footnote 155. 

165 "TERRORISM WATCHLIST: [Organization] Advertises Literature Produced by Persons with Records Related 
to Terrorism," draft HIR, cancelled 2/26/2010, DHS-HSGAC-FC-16408. 

166 Id. 

167 See "Mongols motorcycle gang members arrested," Associated Press , (10/21/2008), 

http://www.usatodav.com/news/nation/2008-10-21-mongols N.htm ; "U.S. targets bikers' identity," Los Angeles 
Times , Scott Glover (10/22/2008), http://articles.latimes.com/2008/oct/22/local/me-mongols22 . 

168 "Mongols Motorcycle Club (MMC) Chapter . . . Issues Guidelines for Intelligence Collection During Police 
Encounters," draft HIR, cancelled 2/17/2010, DHS-HSGAC-FC-16551. 



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"There is nothing illegal or even remotely objectionable [described] in this report," wrote 
the CR/CL reviewer about the draft. "The advice given to the groups' members is protected by 
the First Amendment. The organization does not advocate the violation of ANY laws - on the 
contrary, they tell their members to obey the law." 169 The draft HIR was never published. 

One DHS intelligence officer filed a draft HIR about a U.S. citizen who was appearing at 
a Muslim organization to deliver a day-long motivational talk and a lecture on positive parenting. 
"Intelligence personnel are not authorized to collect information regarding USPERs [U.S. 
persons] solely for the purpose of monitoring activities protected by the U.S. Constitution," the 

170 

DHS Office of General Counsel wrote on the draft. It was cancelled. 

"Constitutionally protected activities; no nefarious activity," wrote a reviewer 
recommending cancellation of a different draft HIR reporting about a Muslim organization 

171 

hosting a daylong seminar on marriage. 

Another cancelled draft HIR reported on a U.S. citizen visiting and giving a lecture at a 
mosque. The draft contained no derogatory information on the speaker, or the mosque, although 
it noted that the speaker was once the head of a U.S. Islamic school that had a record in the TIDE 
database. "There is concern," the drafting officer wrote in his initial submission, "that [the 
subject's] visit . . . could be to strengthen ties with the . . . mosque as well as to conduct 

172 

fundraising and recruiting for the sake of foreign terrorist organizations." This assertion was 
not supported by evidence, however, and was removed from later drafts. 

"The number of things that scare me about this report are almost too many to write into 
this [form]," one reviewer stated about the submission. He noted it was sourced to a fusion 
center on the other side of the country, as well as to open source information - which required it 
to go through a reporting team which specialized in open source information. "Secondly, the 
nature of this event is constitutionally protected activity (public speaking, freedom of assembly, 

1 7^ 

freedom of religion)." 

Markings on the drafts appear to indicate that half of the draft HIRs which appeared to 
overstep legal restrictions on government monitoring of protected activity came from one 
intelligence officer. DHS confirmed that officer "received informal counseling," but faced no 
other penalty, reprimand, formal counseling or other consequence. 174 



uu "TERRORISM WATCHLIST— Individual with Terrorist-related Records Speaks at a Seminar in Santa Clara, 
California," draft HIR, cancelled 7/16/2009, DHS-HSGAC-FC-16303. 

171 "TERRORISM WATCHLIST: Naturalized U.S. Citizen with Records Related to Terrorism is Scheduled to a 
Lead Seminar [sic],"draft HIR, cancelled 1/11/10, DHS-HSGAC-FC-016339. 

172 "TERRORISM WATCHLIST: U.S. Citizen with Terrorist-related Records Speaks at a Mosque ..." draft HIR, 
cancelled 2/17/2010, INT-2483-09, DHS-HSGAC-FC-016644. 

173 Id. 

174 DHS response to Subcommittee inquiry, DHS-HSGAC-FC-059967. 



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(3) Most Fusion Center Reporting Related to Drug Smuggling, 
Alien Smuggling, or Other Criminal Activity 

Of the 386 unclassified HIRs that DHS eventually published over the 13-month period 
reviewed by the Subcommittee investigation, a review found close to 300 of them had no 

175 

discernable connection to terrorists, terrorist plots or threats. 

Most draft HIRs that were accepted by DHS headquarters for dissemination relayed 
information from arrests or encounters relating to drug trafficking and, to a lesser extent, alien 
smuggling. One typical report, based on information acquired in July 2009 and published five 
months later, reads as follows: 

On 05 July 2009 at 1704 hours, Texas DPS officers stopped a 2007 three 
door Ford F-150, bearing identified Arizona license plates, for speeding 
eastbound on Interstate 40 at milepost 56 in Potter County. The driver and 
passenger were nervous and told conflicting stories regarding their travel. 
A search of the vehicle resulted in the seizure of 5.23 kilograms of 
methamphetamine. The methamphetamine was hidden in a false 
compartment built in to the floor of the vehicle behind the front seats. The 
occupants were reportedly traveling from Phoenix, Arizona to Oklahoma 
City, Oklahoma. 

The driver and the passenger of the load vehicle were identified U.S. 
persons (USPER1 and USPER2, respectively). (SOURCE COMMENT: 
USPER2 was previously] convicted for attempting to smuggle 41.9 
pounds of marijuana into the United States from Mexico on 29 December 
2003.) 

The Tucson HIDTA [High Intensity Drug Trafficking Area] has noted an 
increase in the number of methamphetamine seizures from Mexico over the 
last six months . . . . 176 

Additionally, the Subcommittee reviewed redacted, unclassified versions of the 39 
classified HIRs published during the same the time period. About half appeared to contain no 
terrorism-related information. Those HIRs were published on average 142 days, or over four 
months, after the information was obtained by a DHS reporting official. 

Though it may be relevant to broader departmental missions, the preponderance of non- 
terrorism related reporting raises concerns about DHS's fusion center involvement. If reporting 
on drug running and human smuggling are not top priorities in DHS's counterterrorism effort, it 
is unclear how the bulk of published reporting from fusion centers contributes to DHS's 
antiterrorism mission. Conversely, if the most useful fusion center contributions come in these 



" The Subcommittee review of the 386 unclassified HIRs found only 94 had any discernible relationship to 
terrorism. 

17 "HIR/AZ-0032-09 Law Enforcement Officers Seize Methamphetamine From a Vehicle's Hidden Compartment," 
published December 22, 2009, DHS-HSGAC-FC-013267. 



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areas, it is unclear why DHS does not describe fusion centers as essential to its counterdrug and 

177 

anti-human- smuggling efforts, rather than to its counterterrorism mission. 

C. Terrorism-Related Reporting was Often Outdated, 
Duplicative, and Uninformative 

Of the 386 unclassified HIRs published by DHS during the 13-month period reviewed by 
the Subcommittee, only 94 HIRs, or less than one-third, appeared to have a connection to a 
suspected terrorist or terrorist supporter, suspicious behavior that could indicate terrorist intent, 
or criminal activity that could indicate a potential terrorist plot, such as the theft of explosive 
material. 

Those terrorism-related reports were published on average four months after they were 
first drafted. Some appeared to be based on previously published accounts. Some reports, which 
flagged activity by so-called "known or suspected terrorists," appeared to duplicate information 
already being shared by a faster, more efficient system managed by the FBI-led Terrorist 
Screening Center. 

(1) Some Terrorism-Related Reports Were Based on 
Older Published Accounts 

At times, it appears DHS reporting officials at fusion centers based their reporting not on 
sensitive intelligence and law enforcement information from state and local sources, but on 
previously-published accounts, including a press release and news articles. 

Stolen Explosives. One particularly alarming HIR published in March 2010 described 
thefts in the Northwest of hundreds of pounds of explosives and explosive components, 
including 96 pounds of TNT; 27 pounds of deta-sheet, another type of explosive; 17 sticks of 
Dyno-Yello, yet another explosive; four 50-pound bags of "ammonium nitrate/fuel oil 
explosive"; 130 pounds of black powder; 14 bags of "rocket black powder"; 1 1 bags of 
KINEPAK, another explosive; 115 "small blasting cap boosters"; and hundreds of feet of 

178 

detonation cord. 

1 7Q 

The HIR had been drafted, however, in August 2009, seven months prior. The author 

1 80 

acquired the information about the thefts on August 13, according to the report. The thefts 

181 

occurred July 28, 2009, nearly two weeks before the report was apparently drafted. And they 
were the subject of a press release at the time of the thefts: The U.S. Department of Justice's 



The investigation noted the potential for duplication between terrorism-related information sharing efforts by 
fusion centers and FBI-led Joint Terrorism Task Forces (JTTFs), but did not address the issue in its inquiry. At the 
request of House and Senate Homeland Security Committees, the Government Accountability Office is currently 
reviewing fusion centers, JTTFs and other information-sharing entities for potential duplication. GAO expects to 
release its findings in 2013. 

178 "HIR/WA-0001-10 Theft of Explosives from Storage Bunker in Walla Walla, Washington," (3/3/2010), DHS- 
HSGAC-FC-016082. 



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Bureau of Alcohol, Tobacco and Firearms (ATF), which led the joint investigation of the thefts, 
had issued a release to the media about the thefts on July 31, 2009, describing the missing 

1 82 

materials in detail and asking the public for tips and leads. 

Blog Praising Fort Hood Shooting. In one HIR from November 2009, a DHS 
intelligence officer stationed at a California fusion center reported information relating to the 
Fort Hood shooting, which had taken place just days earlier in Texas. Anwar Nassar Al-Awlaki, 
the U.S. -born radical Muslim cleric, praised the shootings on his public blog, the intelligence 

1 83 

officer reported in his draft HIR. 

On the same day the officer reported that news - November 9, 2009 - several news 
organizations, including the Los Angeles Times, ABC News and FOX News ran stories reporting 
the same information. 1 4 On November 13, 2009 - four days after the Los Angeles Times and 
others reported the same information - DHS officials circulated their HIR about Al-Awlaki' s 
blog to colleagues at the NSA, the CIA, the Defense Intelligence Agency, the FBI, Special 

1 85 

Operations Command (SOCOM), even the White House Situation Room. 

Surprisingly, a subsequent performance review for the HIR's author cited this report as a 
signature accomplishment. The performance review gave the author an evaluation of "Achieved 
Excellence," and recommended the official for a promotion to a leadership position "analyzing 
the most critical national security threats facing the Homeland." 186 "His outstanding analytical 

1 87 

abilities would serve I&A well in any position," the appraisal stated. 

Terrorist Threat to Tourists in North Africa. In March 2010, DHS published an HIR 
by a fusion center DHS detailee in California on alleged terrorist threats to tourists in North 

188 

Africa. The HIR repeated verbatim six paragraphs of information from a bulletin published by 
the non-governmental Institute of Terrorism Research and Response (ITRR) 1 1 months earlier, 

1 89 

in April 2009. In the HIR version, the DHS reporter described "the veracity/reliability of the 
source and the information" as "unknown." The reporter did not note that the initial ITRR 



182 "Theft of Explosives in Walla Walla" (7/31/2009), ATF Press Release, 
http://www.atf.gov/press/releases/2009/07/073109-sea-walla-walla-explosives-theft.html . 

183 "HIR/CA-0078-09 Imam Anwar Nassar Al-Awaki [sic] Praised Fort Hood," (1 1/13/2009) DHS-HSGAC-FC- 
014138. 

184 "Fort Hood shooting suspect's ties to mosque investigated," Los Angeles Times, Josh Meyer (1 1/9/2009); 
(11/9/2009) "Tragedy at Fort Hood: What They Knew," World News with Charlie Gibson, ABC News, Brian Ross 
(1 1/9/2009); "Details Emerge About Fort Hood Suspect's Past and His Communications," Fox News, Catherine 
Herridge (11/9/2009). 

185 To make matters worse, DHS published the report misspelling the Al Qaeda imam's name in the report's title, 
dubbing him "Al-Awaki." 

186 Performance review provided by DHS (10/26/2010). DHS-HSGAC-FC-004908 

187 Id. 

188 3/10/2010 "Private Security Firm Claims al-Qaida to Target Tourists in North Africa," HIR/CA-0014-10, DHS- 
HSGAC-FC-013566. 

189 4/28/2009 "TAM-C ALERT: MODERATE: NORTH AFRICA," Institute for Terrorism Research and Response, 
PSI-ITRR-0 1-0001. 



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bulletin stated the "timeline" for the threat was "through 3 June 2009," indicating it was likely 
out of date by the time of its publication by DHS in March 2010. 190 

(2) Many Terrorism-Related HIRs from Fusion Centers Appeared to 
Duplicate a Faster, More Efficient Information-Sharing Process 

Some of the published terrorism-related intelligence reports filed from fusion centers 
during the period reviewed by the Subcommittee appear to have duplicated a faster, more 
efficient information-sharing process already in place between local police and the FBI-led 
Terrorist Screening Center (TSC). 

Of the 94 published terrorism-related intelligence reports from DHS officials at fusion 
centers, 27 of them relayed information about encounters between local law enforcement and 
individuals whose identities were listed in the Terrorist Identities Datamart Environment (TIDE), 
the federal government's central repository for information on who it considers a known or 
suspected terrorist entity. TIDE is maintained by the National Counter Terrorism Center 
(NCTC), an entity under the direction of the Office of the Director of National Intelligence 
(ODNI). 191 

These reports of so-called "TIDE matches" relayed information gathered in the course of 
routine law enforcement incidents, such as a traffic stop or a response to a 91 1 call, in which a 
state or local law enforcement officer came into contact with an individual whose identity was 
listed in the TIDE database, identifying him or her as a "known or suspected terrorist" according 
to the U.S. government. 192 

DHS officials whose responsibilities included reviewing these draft HIRs for release 
explained that in most cases, they published reports of TIDE matches not because the incident 
itself appeared to indicate planning or preparation for a terrorist attack, or even suggested an 
intent to do so, but because the report could contain new biographical data that could be used to 
update the subject's TIDE record. Such reports were supported by DHS guidance contained 
in a June 2010 handbook on HIR production that DHS produced to the Subcommittee. 194 

As the DHS I&A Reporting Branch stated in its 2010 Standard Operating Procedures, 
"DHS TIDE based HIRs are written primarily to update the TIDE record, provide a more 
detailed background of the subject, indicate travel patterns or associations, and to highlight a 
recent incident while providing appropriate background context to a subject's importance for the 



19U 3/10/2010 "Private Security Firm Claims al-Qaida to Target Tourists in North Africa," HIR/CA-0014-10, DHS- 
HSGAC-FC-013566. 

191 For more discussion of NCTC, please see the introduction. 

192 Deficiencies in the TIDE database are described earlier. 

193 Subcommittee interview of Senior Reports Officer (3/20/2012). See also, "Standard Operating Procedure for 
Homeland Intelligence Report Production, v. 1.1," (6/2010) DHS-HSGAC-FC-056483. 

194 Standard Operating Procedure for Homeland Intelligence Report Production, v. 1.1, DHS, 6/25/2010, DHS- 
HSGAC-FC-056483. 



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IC. HIRs typically attempt to fill in the unkown backgrounds of some of these individuals or 
organization^]." 1 5 

Such information could include a driver's license number, automobile registration 
information, information on the subject's origin or destination of travel, even what was in their 
pockets or in the car's backseat. 196 It could include any information lawfully collected by law 
enforcement during the encounter, officials from both DHS and the Department of Justice told 
the Subcommittee. 197 



DHS did not require that the subject of such a report be suspected of or charged with 
violating any law or ordinance to report his or her information. For example, the Subcommittee 
reviewed a report on a TIDE match who was a passenger in a car whose driver was cited for a 
moving violation, and two on TIDE matches who were crime victims. 

The DHS reporting official at the local fusion center learned of a local police officer's 
interaction, possibly by reviewing an incident report. The DHS official then prepared a draft 
HIR and filed it with DHS headquarters in Washington, D.C. 199 

At headquarters, such a draft HIR would go through the four-office review process 
described earlier. After weeks or months spent in the review queue, the HIR would be approved 
by the four offices involved in the process, and DHS would release the report to the intelligence 
community. DHS officials said they would flag these HIRs for NCTC, which maintains TIDE, 
suggesting it update its records on the entities named. 

The result was that, several weeks or months after the incident with a possible TIDE 
match individual occurred, NCTC would receive a report from DHS with information to update 
its records. 



However, as the Subcommittee learned from DHS's senior representative at NCTC, the 
very same data in those reports likely made it to the center within a day of the incident via an 
FBI-run process, possibly making DHS's reporting both untimely and duplicative. 200 

The FBI process occurs without the involvement of a fusion center or DHS: When a 
local police officer or state trooper encounters an individual in the field, for example in a traffic 
stop, he or she checks the person's identification electronically against the National Crime 
Information Center (NCIC) database, an online criminal information clearinghouse that has been 
run by the FBI since 1967. 201 



Subcommittee interview of Joel Cohen (4/16/2012). 

197 Subcommittee interviews of Rick Kopel, DHS/NCTC (4/1 1/2012), and Cordel James, FBI (6/21/2012). 

198 Subcommittee interview of Joel Cohen (4/16/2012). 

199 Id. 

200 Subcommittee interview of Rick Kopel, DHS/NCTC (4/1 1/2012). 

201 Subcommittee interviews of Cordel James, FBI (6/21/2012), Rick Kopel, DHS/NCTC (4/1 1/2012), Joel Cohen 
(4/16/2012); FBI.gov, "FBI-National Crime Information Center," http ://www. fbi . go v/about-us/c j is/ncic/ . 



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44 



The NCIC database contains a "known and suspected terrorist" identities list. It derives 
that list from the Terrorist Screening Database (TSDB), more commonly known as the Terrorist 
Watchlist. The TSDB is maintained by the Terrorist Screening Center (TSC), an FBI-led 
organization. TSC obtains the identities for TSDB from the National Counterterrorism Center's 
TIDE database. 204 

When a local law enforcement officer checks an identity through NCIC, his or her 
computer will display a message if NCIC finds a possible match on its known or suspected 
terrorist list. The message instructs the officer to contact the TSC, which will rely on the 

70S 

officer's help to confirm whether the individual matches the identity on the watchlist. 

When that officer contacts TSC, TSC personnel will ask the officer "to get all the 
information you can," a Justice Department official told the Subcommittee. According to the 
procedure, the officer will gather the information, and share it with TSC personnel at the time of 
the stop. 206 TSC personnel immediately pass that information along to the NCTC, to update the 
individual's record, officials explained to the Subcommittee. 

According to Rick Kopel, DHS's senior representative to NCTC, that sharing of 
information typically occurs on the same day of the local law enforcement official's encounter. 
Mr. Kopel could think of no reason why TSC would fail to timely relay the information to 
NCTC, or which might justify DHS's maintaining a second pathway to share the same 
information. "There's no reason TSC would not report encounter data [to NCTC]," Mr. Kopel 
told the Subcommittee. "If that wasn't happening, that would be a problem." 

These facts indicate DHS may be using fusion center HIRs to report to NCTC 
information about an encounter days, weeks, even months after NCTC already received the same 
information, from the same local source, through TSC. 209 

Asked about this possible duplication, Undersecretary Wagner said if true, "it's probably 
not the most efficient use of resources. ... I would say we should write [intelligence reports] 
that don't duplicate other reporting." 210 



202 Subcommittee interview of Cordel James, FBI (6/21/2012). 

203 Testimony of Timothy J. Healy before the House Judiciary Committee (3/24/10), 
http://www.fbi.gov/news/testimonv/sharing-and-analvzing-information-to-prevent-terrorism . 

204 Id.; Subcommittee interview of Cordel James, FBI (6/21/2012). 

205 Subcommittee interviews of Rick Kopel, DHS/NCTC (4/1 1/2012) and Cordel James, FBI (6/21/2012). 
206 Id. 

207 Id. 

208 Subcommittee interview of Rick Kopel, DHS/NCTC (4/1 1/2012). 

209 At least one DHS I&A official told the Subcommittee that he recalled this duplicative reporting was taking place. 
Mark Collier, a Senior Reports Officer and one-time reporting branch chief, told Subcommittee staff that NCTC at 
times "would get the same 'encounter package'" report "through TSC before they got it from us." Subcommittee 
interview of Mark Collier (3/8/2012). 

210 Subcommittee interview of Caryn Wagner (9/16/2012). 



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D. DHS Intelligence Reporting Officials Who Repeatedly 
Violated Guidelines Faced No Sanction 

The Subcommittee investigation found that a very small number of DHS reporting 
officials appeared to be responsible for many of the problematic HIRs that DHS reviewers later 

211 

cancelled. Just four reporting officials generated 108 of the 188 cancelled draft HIRs during 
the 13-month period reviewed by the Subcommittee, according to a tally of cancelled HIRs by 
the reporter codes which indicated authorship. Those reporters had higher cancellation rates than 
their peers, the tally showed. However, reporters' cancellation rates were not considered when 
managers assessed their performance, according to DHS officials. 

"I don't recall noting poor reporting in an annual review. It never came up as a black 
mark against a guy," said Mikael Johnston, who oversaw IOs as head of the State and Local 
Program Office from October 2009 to March 2012. Jonathan Wilham, deputy director of the 
Reporting Branch, also said that when assessing ROs, "we don't use cancellation rates as a 

212 

performance measure." The Subcommittee also learned that those who repeatedly violated 
guidelines faced no apparent sanction for their transgressions. 213 

DHS detailees at fusion centers were not junior officials. Information provided by DHS 
indicates that detailees were typically GS-14s, near the highest end of the federal workforce pay 

214 

scale. During the period of reporting reviewed by the Subcommittee, salaries for GS-14 
employees ranged from around $80,000 to over $100,000. 215 Additionally, the department 
distributed over $500,000 to the detailees in the form of bonuses, performance awards, and 
recruitment and relocation incentives in 2009 and 2010. 216 

One reporter had 26 of his 35 draft reports cancelled during the April 2009-April 2010 
period. One former Senior Reports Officer said he knew the author and that he had a reputation 

217 

as "a problem child" among Reporting Branch officials. 

"He didn't like to be told what he was doing was not in the realm of the program," the 
former official said, and stated he and others raised the officer's performance with higher-ups. 
"It was a well-known fact that information coming out of [the officer's area] was complete and 
utter crap." 

"I cancelled a lot of them," said one Senior Reports Officer, when asked about that 
particular official's many nixed draft reports. Noting that his reporting often raised concerns 
about violating their subjects' civil liberties, she said, "I would say the person must not have 



211 DHS provided the Subcommittee with limited unclassified biographical data on the reporting officials. As a result 
it was difficult for the Subcommittee investigation to discern whether particular reporting officials were Intelligence 
Officers (IOs) or Reports Officers (ROs). 

212 Subcommittee interviews of Mikael Johnston (6/18/2012) and Jonathan Wilham (3/6/2012). 

213 DHS response to Subcommittee inquiry, DHS-HSGAC-FC-059967. 

214 DHS personnel spreadsheet, DHS-HSGAC-FC-7154. 

215 General Schedule Salary Tables, 2009 and 2010, U.S. Office of Personnel Management, 
http://www.opm.gov/oca/10tables/index.asp . 

216 DHS personnel spreadsheet, DHS-HSGAC-FC-7154. 

217 Subcommittee interview of Former Senior Reports Officer (3/21/2012). 



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understood what was reportable and what wasn't .... You could see this was a pattern." The 
Subcommittee investigation reviewed the reporter's 26 cancelled drafts, and found that reviewers 
explicitly noted civil liberties concerns when canceling at least 12, because they improperly 
reported on Constitutionally-protected activity. That intelligence officer was responsible for 
more than a quarter of all draft HIRs rejected for potentially breaching DHS guidelines meant to 
keep reporters from violating Americans' privacy and civil liberties. 

Another reporting official had 32 of his 84 reports - nearly 40 percent - cancelled by the 
Reporting Branch for various reasons. "That's a pretty high cancellation rate," said Mark 
Collier, a Senior Reports Officer and one-time reporting branch chief, when asked his reaction to 

219 

that track record. "If that was my reporting officer, we would have real talks." 

Jonathan Wilham, a key DHS official overseeing the report review and release process, 
told the Subcommittee that reporters are not judged by how frequently their draft HIRs were 
cancelled. The reasons for cancellations were rarely similar, according to Mr. Wilham. "It was 

220 

really case-by-case," he said. Mr. Wilham cited three criteria by which he believed a 
reporters' products should be assessed; the reporter's rate of cancellation was not one of them. 221 

Reporters generating high rates of problematic reporting were a headache for the 
Reporting Branch. "You would have some guys, the information you'd see from them, you'd 
scratch your head and say, 'what planet are you from?'" one Senior Reports Officer recalled. 

222 

"Some individuals [were] producing 50 percent garbage. That would add to the queue." Bad 
reporting was a concern, another former Senior Reports Officer recalled from the period. "We 
were heading down a path that wasn't in the best interests of the department," he told the 

223 

Subcommittee. 



Mr. Vandover said he recalled as many as five cases in which he went to SLPO officials 
to complain about the quality of reporting by their intelligence officers. "The people who 
repeatedly did this kind of thing were reported," Mr. Vandover told the Subcommittee. "This 
went to Undersecretary levels, on these particular people." 224 

DHS officials interviewed could not identify a single official who faced significant 

225 

consequences for shoddy reporting. In a written response to the Subcommittee, DHS said that 
"a number of individuals involved in the [reporting] process . . . received informal counseling on 
the need to improve the quality of their [reports] and work with headquarters constructively to 
resolve any issues that arose from the clearance process." 226 



Subcommittee interview of Senior Reports Officer (3/20/2012). 

219 Subcommittee interview of Mark Collier (3/8/2012). 

220 Subcommittee interview of Jonathan Wilham (3/6/2012). 

221 Id. 

222 Subcommittee interview of Former Senior Reports Officer (3/21/2012). 

223 Subcommittee interview of Former Senior Reports Officer (3/1/2012). 

224 Subcommittee interview of Harold "Skip" Vandover (3/22/2012). 

225 Subcommittee interviews of Mikael Johnston (6/18/2012), Harold "Skip" Vandover (5/24/2012), Keith Jones 
(4/2/2012). 

226 DHS response to Subcommittee inquiry, DHS-HSGAC-FC-059967. 



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The problem of substandard reporting, according to former Deputy Undersecretary for 
I&A Jim Chaparro, was "systemic." In a January 2010 memo, Mr. Chaparro reported: 

[T]here have been cases where I&A state and local fusion center 
representatives have pushed ROs to submit reports which do not meet 
reporting criteria. Since most deployed ROs are contractors or junior 
personnel who are not in a position to speak authoritatively to the state 
and local representatives and as well, to avoid conflict, the CRD ROs 
have submitted reports which do not fall within the scope of these 
activities. This in turn creates a larger volume of reporting that goes 
into the review process only to be returned to the originator for failure 
to meet reporting criteria. It is important that a better understanding at 
the State and Local Fusion Center level be developed regarding what 

227 

information is reportable under intelligence oversight standards. 

"I think that's in the past," said Undersecretary Wagner when asked about her officers' 
reporting information that potentially violated privacy and civil liberties protections. "The HIR 
Working Group [recommendations] are designed to ensure we report on information that met 

228 

reporting criteria, and were respectful of privacy and civil liberties protections." 

E. DHS Did Not Sufficiently Train Its Fusion Center Detailees 
to Legally and Effectively Collect and Report Intelligence 

Draft HIRs from IOs sometimes reported information that did not meet a DHS mission, 
improperly relayed information on Constitutionally-protected activity, or contained significant 
typographical errors, according to officials and internal documents. These problems were less 
likely to have occurred if reporting officials had received more extensive training and passed a 
rigorous certification process. 

While the training process changed over time, the Subcommittee learned that DHS has 
never required more than five days of intelligence reporting training for DHS personnel assigned 

229 5 

to fusion centers. Moreover, DHS has not required its reporting officials to pass a test or 
exam, or demonstrate they met any formal standards before they went into the field to gather 
information, despite the fact that they often collect and report sensitive information on U.S. 
persons. 

DHS intelligence reporting officials interviewed by the Subcommittee regarded their 
department's intelligence reporting training as inadequate. "You can barely teach people what 
the word ['intelligence'] means" in a week, said Harold "Skip" Vandover, who was chief of the 



~ Memorandum from James Chaparro to Bart Johnson, "Homeland Intelligence Reports (HIRs)" (1/7/2010), DHS- 
HSGAC-FC-050742. 

228 Subcommittee interview of Caryn Wagner (9/16/2012). 

229 In August 2012, the department initiated a "pilot" three-week training course for reports officers, but it is a test 
and has not been instituted as a recurring course. Subcommittee interview of Harold "Skip" Vandover (8/22/2012). 



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reporting branch from December 2009 to December 201 1. "All the problems we saw - are all 

23 1 

linked right straight back to training." 

"I knew we needed to rework training, I knew it was a problem," James Chaparro, I&A 
Deputy Under Secretary, told the Subcommittee in an interview. Indeed, Mr. Chaparro had 
identified the need for more extensive training in a January 2010 memorandum to Bart Johnson, 

233 

then acting Undersecretary of I&A. Later in 2010, the HIR Working Group examined the 
issue and also noted weaknesses in intelligence reporter training and a lack of certification. In 
March 201 1, I&A Undersecretary Caryn Wagner approved a recommendation to improve 
training and institute a certification process. As of September 2012, her office has conducted a 

7^4 

pilot enhanced training course, but has yet to implement a new training program. 

235 

The Five-Day Course. Until it was discontinued in 2012, DHS's training for reports 
officers had been a five-day series of classes known as the DHS Reports Officers Basic Course 
(ROBC). 

The 33-hour course spent one day on the background and basics of the job, including the 
history of DHS and the roles and responsibilities of a Reports Officer. One day was dedicated to 
intelligence requirements and thresholds; another day was spent on intelligence oversight issues, 
including privacy and civil liberties. The fourth day covered the HIR reporting format. The fifth 
day spent three hours on HIR writing practice, 90 minutes for review and questions, and a half- 
hour ceremony, at which participants received "graduation certificates" for their attendance at 
the training. 236 

Participants in that weeklong course received a total of two hours' training on civil 
liberties issues and two hours on privacy issues, according to Ayn Crawley, who has headed 

237 

training for the DHS Office for Civil Rights and Civil Liberties since 2008."' Ms. Crawley told 
the Subcommittee she felt two hours was sufficient to train Intelligence Officers in what they 



Subcommittee interviews of Harold "Skip" Vandover (3/22/2012); Timeline of Reporting Branch chiefs, DHS- 
HSGAC-FC-050767. 

231 Subcommittee interviews of Harold "Skip" Vandover (3/22/2012, 5/24/2012). 

232 Subcommittee interview of James Chaparro (6/28/2012). 

233 Memorandum from James Chaparro to Bart Johnson, "Homeland Intelligence Reports (HIRs)" (1/7/2010), DHS- 
HSGAC-FC-050742. 

234 Subcommittee interview of Caryn Wagner (9/16/2012). "It's a pilot, a proof of concept, to see if we can meet all 
the requirements," Daylen Heil, a DHS official coordinating the training effort, told the Subcommittee in August, 
when the course was underway. At that point no further training courses had been scheduled, Mr. Heil said. 
Subcommittee interview with Daylen Heil (8/22/2012). 

235 DHS is no longer teaching the course, and is piloting a new three-week training. Subcommittee interviews of 
Harold "Skip" Vandover (8/22/2012), Caryn Wagner (9/16/2012), DHS response to Subcommittee inquiry, DHS- 
HSGAC-FC-059968. 

23 "Unit 5.2 - Graduation" of the course student guide reads, "Congratulations! After you are briefed on the 
graduation process, a senior DHS official will offer closing remarks and distribute graduation certificates." It lists 
"Topics Covered" during graduation to include "The importance of training to the success of the Intelligence 
Enterprise." DHS Reports Officer Basic Course (ROBC) Student Guide, Rev. 051 1, DHS-HSGAC-FC-0571 17. 
237 Subcommittee interview of Ayn Crawley (6/13/2012). 



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49 



needed to know to do their jobs while staying within the law and DHS guidelines. "I think it's 
doing the job it should do." 

Ms. Crawley confirmed that the trainers did not administer any final test or exam to the 
students, or assign a grade or score to their performance. Trainers did not even have the option 
of failing a student. Ms. Crawley said her belief in the adequacy of the training was based on 
first-hand observations by trainers. "I think what you're looking for is true transfer of 
knowledge," Ms. Crawley explained to the Subcommittee. "That interaction is a lot more 
powerful." 239 

Some officials who engaged in reporting from state and local fusion centers had little 
intelligence reporting experience of any kind prior to joining DHS. 240 For them, DHS's training 
was clearly insufficient to educate them on even the basics of intelligence, officials told the 
Subcommittee. 



"The [reporting] process is not as simple as ending your sentences with periods," 
explained a former Senior Reports Officer at DHS who had spent nine years prior as an Army 
intelligence analyst. "There is a validation process, you fill intelligence gaps. I don't think 
that's something you can send someone to a weeklong training and expect them to understand 



The training program "probably wasn't adequate for most people," said another former 
DHS Senior Reports Officer (SRO). Before joining DHS, he had been an intelligence analyst in 
the Army, where he said he received six months of training, half of which was dedicated to 
report writing. The difference in depth and scope between his Army training and the DHS 
training, he said, was "night and day." 242 

Like these two former officials, some DHS reporters had prior intelligence experience, 
but virtually none of them had experience reporting on U.S. citizens and legal residents within 
the United States. "Privacy, [protections for] U.S. person data - it is extremely difficult to get 

243 

them to understand . . . those nuances," Mr. Vandover said. 



"The reality is even if you came [to DHS] with extensive Intelligence Community 
experience, what we do is quite a bit different," said Mark Collier, a DHS Senior Reports Officer 



~ The Subcommittee reviewed resumes for DHS Intelligence Officers at fusion centers and found that most had 
years of intelligence experience, but few reflected experience collecting intelligence or drafting reports. Mikael 
Johnston, who oversaw IOs until March 2012, said he believed about a third of IOs had come to DHS with some 
experience or training in reporting. Subcommittee interview of Mikael Johnston (6/18/2012). 

241 Subcommittee interview of former Senior Reports Officer (3/1/2012). 

242 Subcommittee interview of former Senior Reports Officer (3/21/2012). 

243 Subcommittee interview of Harold "Skip" Vandover (3/22/2012). 



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and one-time reporting branch chief. "You really need training." Mr. Collier told the 
Subcommittee that the need to improve DHS's training of reports officers was "obvious." 245 

Internal documents between senior DHS officials show senior managers shared his view. 
In April 2009, an email from Barbara Alexander, then Director of I&A's Collections and 
Requirements Division, wrote to other I&A officials warning that DHS reporters at fusion 
centers were filing reports "on U.S. persons (USPER), without proper vetting[.]" She wrote that 
one of the main reasons for this was "a lack of training on proper collection and reporting 
procedures[.]" 246 

In a January 2010 memorandum, addressed to Bart Johnson, then the Acting Under 
Secretary for Intelligence and Analysis, former I&A Under Secretary for Operations James 
Chaparro stated that "the current quality of information in HIR reports is inconsistent," in part 
because reports officers "do not always apply sufficient scrutiny to the data which they are asked 
to turn into an HIR[.]" Mr. Chaparro prescribed "enhanced training of the ROs" to fix the 

247 

problem. 

Despite that recommendation, the training regimen has not yet substantially changed. A 
year later, at the end of 2010, the HIR Working Group helmed by Ms. Kardell again pinpointed 

*~ 748 

the Department's weak training of intelligence reporting officials as a serious problem. In its 
final report, Ms. Kardell' s group observed DHS had no standards or minimum qualifications that 
reporters had to meet before it sent them into the field to collect intelligence, largely information 
about U.S. persons. "Currently there are no formal [department- wide] standards or requirements 
for training or certification that must be met prior to an RO or SRO placement," the Working 
Group's final report stated. "The HIRWG unanimously felt that these standards and 
requirements should be established to ensure individuals engaged in HIR production, review, and 
control are trained and qualified in a uniform and satisfactory manner." 24 In March 201 1, 
Undersecretary Wagner asked her office to act on the report's recommendations, including 
reform of the training program. 250 

Incomplete Training Overhaul. By August 2012, more than a year after 
Undersecretary Wagner approved the group's recommendation to develop and implement better 



244 Subcommittee interview of Mark Collier (3/8/2012). 

245 Id. 

24 Email from Barbara Alexander to James Chaparro, et al., "Subject: Open Source Requirements," (4/1/2009) 
DHS-HSGAC-FC-059585. 

247 Memorandum from James Chaparro to Bart Johnson, "Homeland Intelligence Reports (HIRs)" (1/7/2010), DHS- 
HSGAC-FC-050742. 

248 Subcommittee interview of Amy Kardell (6/5/2012). Ms. Kardell said the HIRWG report was complete before 
December 2010, but was delayed from being formally submitted to Undersecretary Wagner because of several 
factors, including Christmas vacation. Concerns from other offices about drafting the report's cover memorandum 
delayed the report's submission by two months, Ms. Kardell said. See also "Homeland Intelligence Report Working 
Group (HIRWG) Phase 1 Report and Recommendations," (1 1/2010) DHS-HSGAC-FC-050770 

249 "Homeland Intelligence Report Working Group (HIRWG) Phase 1 Report and Recommendations, " (1 1/2010) 
DHS-HSGAC-FC-050770, at 4. 

250 "Homeland Intelligence Report Working Group (HIRWG) Phase 1 Report and Recommendations," (1 1/2010) 
DHS-HSGAC-FC-050770. 



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training and requirements, no improvements have been institutionalized, although a new, longer 

25 1 1 

training is being tested, according to documents and DHS officials. 

In August 2012, during the period of the Subcommittee's investigation, I&A suspended 

"~ 759 

the five-day reporter training classes Ms. Kardell's group and others had found so lacking for 
years prior, and began to reform and expand the Reports Officer Basic Course. But even the new 
training course may be inadequate. Mr. Vandover, who is a subject matter expert for DHS's 
effort, told the Subcommittee he recommended the course needed to be extended to six weeks. 253 
He said he was told DHS could only afford a three-week course. Mr. Vandover told the 

254 

Subcommittee he believed three weeks was insufficient time for proper training. 

When asked about the pilot training course, Undersecretary Wagner disagreed that 
financial concerns spurred the decision to limit the course length to three weeks. "I don't know 
about money [not being] available," she said. Instead, Ms. Wagner said the issue was that the 
course was not mandatory, and if it was too long then DHS components would not use it. "I 
think the likelihood of components sending people to a 6-week course was pretty slim," she told 
the Subcommittee. However if the course were to be voluntary, it would not fulfil the 
unanimous recommendation of the HIR Working Group, which stated: "Mandatory training will 
be required for all RO and SROs. . . . Components must require that their ROs and SROs receive 
this training prior to writing and releasing HIRs." 

F. "Two Different Chains of Command" 

Another problem involved the differences between IOs and ROs assigned to fusion 
centers. As of May 2012, DHS has assigned 66 IOs and 18 ROs to centers across the country. 
IOs are overseen by the SLPO, while ROs are overseen by the Reporting Branch. 

When Reporting Branch officials noticed an 10 's intelligence reporting was subpar, 
inappropriate, or potentially illegal, there was little the Reporting Branch could do but notify 
SLPO officials, who oversaw those IOs but whose office had few rules or procedures for 
ensuring domestic intelligence collection activities were effective and appropriate. "You're 
talking two different chains of command, I didn't have control of those individuals," explained 
Mr. Vandover, the former Reporting Branch chief. 256 Thus the Reporting Branch, which was 
responsible for the reviewing draft HIRs and preparing them for publication, did not have the 
authority to oversee or manage the individuals preparing many of those reports. 



251 Memorandum from Caryn Wagner to DHS Homeland Security Intelligence Council, "Subject: DHS Reports 
Officer Course (ROC)" (4/25/2012), DHS-HSGAC-FC-059035. The "pilot" course is being conducted on a one- 
time basis with a class of 10 students. There are hopes to improve the training and offer it in 2013 and beyond, but 
those courses are not yet scheduled. Subcommittee interview of Daylen Heil (8/22/2012). 

252 DHS response to Subcommittee inquiry (9/21/2012), DHS-HSGAC-059968. 

253 Memorandum for Brian Kelly, "SUBJECT: Development of the Reports Officer Course, (ROC)" (2/3/2012), 
DHS-HSGAC-FC-059023 . 

254 Subcommittee interview of Harold "Skip" Vandover (5/24/2012). 

255 3/2011 Homeland Intelligence Report Working Group (HIRWG) Phase 1 Report and Recommendations, 
November 2010, DHS-HSGAC-FC-050770. 

256 Subcommittee interview of Harold "Skip" Vandover (3/22/2012). 



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G. Short-Staffing and Reliance on Underqualified, Underperforming 
Contract Employees Hampered Reporting Efforts 

Another problem with HIRs was that I&A was unable to hire sufficient numbers of 
sufficiently qualified personnel to staff its Reporting Branch, a problem that affected its efforts to 
receive and process intelligence originating at state and local fusion centers. 

At times, Reporting Branch personnel were simply unable to handle the amount of 
reporting being drafted. In his January 2010 memo to Bart Johnson, Mr. Chaparro warned of 
staffing shortfalls affecting the reporting process from state and local fusion centers. "[T]here 
are too many HIRs being generated and not enough staff to review and edit the HIRs," wrote the 
Deputy Under Secretary. "There is little logic to drafting large numbers of HIRs [if] we lack the 

257 ^~ 

bandwidth to publish and disseminate them." 

As it did in other offices, DHS sometimes filled vacant spots in I&A's Reporting Branch 
with personnel provided under contract from private companies, including General Dynamics 

258 

and Booz Allen Hamilton. 

DHS officials told the Subcommittee that contract employees were not always qualified 
or properly trained to do the work expected of them, and their productivity could be 
substandard. 

When Mr. Vandover arrived as chief of the Reporting Branch in December 2009, he 
found a "lack of proficiency" among contract employees at the branch, who at the time 
outnumbered the federal employees under his direction, he recalled. "It's difficult to run a 
branch like this when you're so heavy on contractors," he said. 260 

Mr. Vandover recalled that he quickly identified four contract employees out of roughly a 
dozen who he believed were not doing their job. "What I mean by, 'not doing their job,' is - not 
doing their job," Mr. Vandover told the Subcommittee. He said he had them replaced. 261 

In his January 2010 memo, Mr. Chaparro explicitly noted concern about contractors 
drafting and reviewing intelligence reports. Mr. Chaparro stated he hoped to soon be "filling RO 



Memorandum from James Chaparro to Bart Johnson, "Homeland Intelligence Reports (HIRs)" (1/7/2010), DHS- 
HSGAC-FC-050742. 

258 GAO Report, "Department of Homeland Security: Risk Assessment and Enhanced Oversight Needed to Manage 
Reliance on Contractors" (10/17/2007), GAO-08-14T, http://www.gao.gov/new.items/d08142t.pdf ; Subcommittee 
interviews of Jonathan Wilham (3/6/2012) and Harold "Skip" Vandover (3/22/2012). 

259 The Subcommittee notes that several DHS officials interviewed for the investigation first joined the Department 
as contract employees. Subcommittee interviews of former I&A Senior Reports Officer (3/1/2012), Jonathan 
Wilham (3/6/2012), former Senior Reports Officer (3/28/2012), former Senior Reports Officer (3/30/2012), and 
Keith Jones (4/2/2012). 

260 Subcommittee interview of Harold "Skip" Vandover (3/22/2012). Mr. Vandover told the Subcommittee that 
when he joined the branch in December 2009, it had 10 government employees and between 20 and 25 contractors. 

261 Subcommittee interview of Harold "Skip" Vandover (3/22/2012). 



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53 



[reports officer] positions with government personnel versus contractors," which he believed 
would "help I&A to build and sustain a professional cadre of ROs." 262 

Still, the branch consisted mostly of contractors, and Mr. Vandover found himself 
managing his team not against the quality of their product but against contract deliverables. "If I 
have to tell you your deliverables, [I] have to be able to quantify. How many [reports] a day do 
you have to do?" 263 Instead of emphasizing the quality of the reporting, Mr. Vandover said, he 
had to emphasize minimum requirements of production. 

The result was a quota system. Reports officers reviewing drafts "were tracked by the 
number [of reports] they produced, not by quality or evaluations they received," recounted a 
former Senior Reports Officer, who worked for Mr. Vandover. "If you wanted to stay employed, 
you produced reports." 264 

One former Senior Reports Officer described how part of his job was to track production 
by the Reports Officers under him. "How many reports did we produce this month?" he 
remembered being asked. "[Production numbers were extremely important." The benchmark, 
he said, was producing more reports, not better reporting. "You had a good year if you put more 
reports out than the year before." 265 Those numbers were tracked on a regular basis via 
spreadsheets showing production for that time period versus the same period a year ago, 
according to Reporting Branch officials. 266 

Mr. Vandover confirmed that reporting quotas were a key measure of performance. He 
conceded it wasn't a system that would generate good intelligence. "We had to give them an 
average - a daily quota," Mr. Vandover said, "which is not the way you should do this." 267 

The reliance on contractors also appears to have derailed earlier efforts to improve the 
Reporting Branch training course. In 2009, Senior Reports Officer and one-time reporting 

268 

branch chief Mark Collier worked to revamp the training program, but he told the 
Subcommittee his superiors decided the new training could not go beyond a week in length, just 
like the old program. "I was told that if it was longer, the [reports officers] who were contractors 
couldn't [participate] because their company was paying for it," Mr. Collier explained. "The 
understanding was that contract employees were to come [to DHS] with the training they need, 
so other training shouldn't be necessary." 269 



Memorandum from James Chaparro to Bart Johnson, "Homeland Intelligence Reports (HIRs)" (1/7/2010), DHS- 
HSGAC-FC -050742. Mr. Vandover noted that a Reports Officer in Phoenix, Arizona was a contract employee. 
Subcommittee interview of Harold "Skip" Vandover (3/22/2012). 

263 Subcommittee interview of Harold "Skip" Vandover (3/22/2012). 

264 Subcommittee interview of former Senior Reports Officer (3/21/2012). 

265 Id. 

266 Subcommittee interviews of Harold "Skip" Vandover (3/22/2012) and former Senior Reports Officer 
(3/21/2012). 

267 Subcommittee interview of Harold "Skip" Vandover (3/22/2012). 

268 DHS response to Subcommittee inquiry (9/14/2012), DHS-HSGAC-FC-059877. 

269 Subcommittee interview of Mark Collier (3/8/2012). 



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H. Reporting Officials Aren't Evaluated on the Quality of Their Reporting 

As of July 2012, DHS relied on 66 Intelligence Officers and nine regional directors to 
identify reportable intelligence from fusion centers, 270 while only 18 Reports Officers were in the 

27 1 

field. However, during the period of review, the State and Local Program Office, which 

272 

oversees the IOs, did not evaluate IOs on the quality of their reporting. The Reporting Branch 
did not have the authority or any mechanism to evaluate the performance of the IOs who draft 
HIRs at fusion centers. The Reporting Branch also did not evaluate the quality of the reporting 
filed by their own ROs, although materials provided by DHS suggest managers may take 
cancellation rates into account when reviewing RO performance. 

Jonathan Wilham, a longtime DHS Reporting Branch official and deputy chief of the 

274 

branch, has overseen day-to-day operations at the branch since April 2009/'" Mr. Wilham 
confirmed to the Subcommittee that his office does not have a method to evaluate reporting 
officials on the quality of their reporting. "We're still trying to figure out how we want to do 
it." 275 

In her interview with the Subcommittee, Undersecretary Wagner contradicted Mr. 
Wilham' s statement. "Most ROs out there are evaluated by their reporting," she said. When 
informed of Mr. Wilham' s statements, Ms. Wagner responded, "interesting." 276 



Email from DHS to Subcommittee staff, "Subj: Request from Wilham interview" (7/26/2012). 

271 DHS Support to Fusion Centers (5/3/2012), PSI-DHS-56-0021. 

272 "I don't recall noting poor reporting in an annual review. It never came up as a black mark against a guy," said 
Mikael Johnston, who was head of the SLPO in 2009 and 2010. Subcommittee interview of Mikael Johnston 
(6/18/2012). 

273 DHS provided one personnel review document for a Reports Officer which cited the RO's intelligence reporting 
reflected "an 80% acceptance rate and 85% error free." "Employee Performance Plan and Appraisal Form for the 
period 10/1/201 1-9/30/2012," (produced 8/17/2012), at 3, DHS-HSGAC-FC-059577. 

274 Subcommittee interview of Jonathan Wilham (3/6/2012). 

275 Mr. Wilham said he had at one time proposed three metrics for assessing the quality of reports officer production 
centered on whether the intelligence was used by others in the Intelligence Community: first, evaluations submitted 
by consumers of the reports informing DHS of their value; second, instances in which reports are cited within 
finished intelligence analysis; and third, instances in which readers have requested further information from the 
branch about the incident being reported. The branch has never instituted a formal review that incorporated these 
metrics. The Subcommittee requested and received from DHS a tally of reports which had been the subject of any 
such evaluation, cite or request for information. In all, 17 percent of published HIRs from fusion centers received 
any form of recognition identified by Mr. Wilham. Subcommittee Interview of Jonathan Wilham (3/6/2012). 

276 Subcommittee interview of Caryn Wagner (9/16/2012). 



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I. A Hastily-Implemented and Poorly Coordinated Review Process 
Delayed Reporting by Months 

The enhanced review process required by DHS Deputy Secretary Lute began in May 
2009. It was clearly necessary, given the poor quality of reporting. However, the new process 
had the foreseeable consequence of also slowing the dissemination of completed HIRs. For 
reports published in June 2009, officials took on average 104 days, more than three months, from 

277 

generating a draft HIR to releasing it, according to a Subcommittee analysis. 

In the months that followed, the rate of publication came to almost a dead stop. From 
August to December 2009, DHS published only five or fewer HIRs per month that came from 

978 

fusion centers, according to DHS records supplied to the Subcommittee. 

Meanwhile, DHS officials continued to portray fusion centers to the public as active and 
essential collaborators in the national counterterrorism intelligence effort. In a September 2009 
hearing before the Senate Homeland Security and Governmental Affairs Committee, in the 
middle of the five-month period when intelligence reporting from fusion centers had all but 
ground to a halt, DHS Secretary Napolitano testified that state and local fusion centers were "key 
tools for stakeholders at all levels of government to share information related to threats," and 
"the primary way that DHS shares intelligence and analysis with our homeland security 

279 

partners." Delays in reporting from fusion centers were not mentioned at the hearing. 

Although the new review process had clearly delayed DHS's ability to timely "connect 
the dots" by sharing raw intelligence among all levels of government - one of the reasons 
Congress and the White House created the Department - only one official interviewed by the 
Subcommittee could recall the Deputy Secretary's office inquiring about the problems the new 
policy had created, or what needed to be done to ensure it functioned more efficiently. Former 
Acting Under Secretary of I&A Bart Johnson said he remembered Deputy Secretary Lute asking 
how things were going. "Weeks, a month or so after the new guidance was issued, the Deputy 
Secretary asked basically, 'how's it going?'" Mr. Johnson told the Subcommittee. "I told her, 



To obtain this average, the Subcommittee first identified all HIRs from fusion centers DHS published in June 
2009 during the 13-month period underview; and for each, calculated the number of days between its drafting and its 
date of publication; and then averaged the time periods. 

278 See 12/30/2009 Memorandum from Philip Graven to James Chaparro, "Subject: The Fiscal Year 2009 4 th 
Quarter Management Report," DHS-HSGAC-FC -058860. The Reporting Branch has not been alone in delaying or 
temporarily halting intelligence reporting. Officials told the Subcommittee that at different times, reporting from 
certain DHS components, notably U.S. Citizenship and Immigration Services (CIS), and the Transportation Security 
Administration, has halted or been severely restricted. Subcommittee interviews of Senior Reports Officer 
(3/20/2012) and Amy Kardell (6/5/2012); HIR Working Group Notes, Meeting July 23, 2010, DHS-HSGAC-FC- 
056573; Subcommittee interview of Chuck Robinson (7/18/2012). 

In a written response to the Subcommittee, CIS stated that between 2008 and 2009 it filed fewer than 100 
reports, It noted that it had an I&A reports officer supporting its efforts during the period, whom they asked to be 
removed "due to poor performance." CIS response to Subcommittee inquiry (9/14/2012), DHS-HSGAC-FC- 
059878. The Subcommittee received no response from TSA. 

279 Prepared Testimony of Secretary Napolitano before the Senate Committee on Homeland Security and 
Governmental Affairs, "Eight Years after 9/11: Confronting the Terrorist Threat to the Homeland," (9/30/2009) 
http://www.dhs.gov/news/2009/09/30/secretarv-napolitanos-testimonv-eight-years-after-91 1-confronting-terrorist- 
threat , accessed 9/18/2012. 



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it's creating some challenges, in terms of timelines." The Subcommittee invited a written 
response to these allegations from Ms. Lute's office, and documents supporting her response, but 
the Department provided neither. 

DHS officials involved in the enhanced review process told the Subcommittee that the 

28 1 

slowdown occurred in part because of problems at the Office of General Counsel (OGC). An 
OGC representative told the Subcommittee that his office had workforce problems which 
"contributed" to the backlog. Specifically, he said that turnover at the junior attorney position 

282 

responsible for reviewing HIRs "likely slow[ed] the process." 

When asked who within OGC was held accountable for the problems, Matthew Kronisch, 
DHS Associate General Counsel for Intelligence, answered, "By the end of December 2009, the 
attorney responsible for representing [OGC] in the review process during the period in which the 
backlog developed was no longer employed at DHS." 

At the Subcommittee's request, OGC identified the departed official. In an interview 
with the Subcommittee, the official stated that he was the primary OGC employee who reviewed 
the draft HIRs during 2009, and the volume of reporting meant the task of reviewing the drafts 

284 

overwhelmed his other responsibilities. 

The official said he made his superiors at OGC aware of the situation, but they did not 
appear concerned. He indicated that they assigned no additional resources to assist him. "My 
understanding was HIRs were not an immediate priority - not to be ignored, but not first on 
anybody's list," he recalled for the Subcommittee. 

The official said he did not believe the task could be done by a single person. "It was a 
setup for failure," he said. He stated he was never reprimanded or counseled because of the 
delays in reviewing HIRs. He added that when he submitted his resignation, his superior, Mr. 



Subcommittee interview of Bart Johnson (7/1 1/2012). 

281 Subcommittee interviews of Harold "Skip" Vandover (3/22/12), Timothy Skinner (3/14/12), and Jonathan 
Wilham (3/6/12). In addition, a December 2009 memorandum from Philip Graven to James Chaparro suggested a 
policy dispute between OGC and the Reporting Branch contributed to the virtual shutdown, although that policy 
dispute was not mentioned by the individuals interviewed. Memorandum from Philip Graven to James Chaparro, 
"Subject: The Fiscal Year 2009 4 th Quarter Performance Management Report" (12/30/2009), DHS-HSGAC-FC- 
058860. 

282 "Responses to Questions Submitted to Matthew L. Kronisch," (3/22/2012), DHS-HSGAC-FC-047634. 

283 Id. Mr. Kronisch acknowledged that OGC and other review offices spent many hours reviewing and revising 
draft reports that the Reporting Branch had already concluded were the product of unauthorized intelligence efforts. 
"The reviewing offices expended significant effort attempting to perfect these noncompliant nominations, many of 
which could not be perfected," Mr. Kronisch told the Subcommittee. At one point, he said, over 300 troubled drafts 
languished in the review process before most of them were eventually cancelled. 

284 Subcommittee interview of Curt Heidtke (8/12/2012). 



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Kronisch, asked him to stay on another four months. 286 These OGC staffing problems were on 
top of inadequate staffing at the Reporting Branch, discussed earlier. 

Another problem may have also contributed to the delays. DHS officials interviewed 
who had been involved in the review process for the Privacy Office and CRCL were unable to 
identify formal written guidance from their offices on how to review HIRs, what to look for, or 

287 

what thresholds to apply in determining what was acceptable or unacceptable. 

J. Retaining Inappropriate Records is Contrary to DHS Policies 
and the Privacy Act 

DHS personnel "are prohibited from collecting or maintaining information on U.S. 
persons solely for the purpose of monitoring activities protected by the U.S. Constitution, such as 
the First Amendment protected freedoms of religion, speech, press, and peaceful assembly and 
protest," as the department's Office of General Counsel reminded I&A employees in April 
2008. 288 

This reminder appears to reflect the statutory prohibitions contained in the Privacy Act of 
1974, which bars federal agencies from improperly collecting and storing information on U.S. 
citizens and lawfully admitted aliens based solely on First Amendment-protected activities 
without a valid reason to do so. 

The Subcommittee investigation reviewed 40 cancelled draft HIRs from the period of 
April 2009 through April 2010, each of which DHS officials had cancelled after raising privacy 
or civil liberties concerns about their content. 290 

As noted above, the Privacy Act prohibits agencies from storing information on U.S. 
persons' First Amendment-protected activities if they have no valid reason to do so. 
Additionally, DHS's own intelligence oversight procedures allow the department to retain 
information about U.S. persons for only 180 days, in order to determine if it can be properly 
retained. Once a determination is made that the document should not be retained, the "U.S. 

29 1 

person identifying information is to be destroyed immediately." 



286 Id. Asked if Mr. Heidtke's statements were accurate, DHS said it did not have further comment on the matter, 
and deferred to Mr. Heidtke's version of events. Email from DHS to Subcommittee, "Subject: RE: Fusion Center 
questions" (9/7/2012). 

287 Subcommittee interviews of Timothy Skinner (3/14/2012), Ken Hunt (2/27/2012), and Margo Schlanger 
(5/22/12). 

288 Memorandum from Charles E. Allen and Matthew L. Kronisch to All Employees, Detailees, and Contractors 
Supporting the Office of Intelligence and Analysis, "SUBJECT: Interim Intelligence Oversight Procedures for the 
Office of Intelligence & Analysis," (4/3/2008) DHS-HSGAC-FC-047637. 

289 5 U.S.C. Sec. 552a(e)(7) 

290 The HIRs were identified by DHS in September 201 1, in response to a Subcommittee request for copies of draft 
HIRs that had been recommended for cancellation. These 40 were recommended for cancellation by the Privacy 
Office, the Civil Liberties office, or both; or they were cancelled by a reports officer who explicitly cited privacy or 
civil liberties concerns in his or her recommendation to cancel. 

291 Memorandum from Charles E. Allen and Matthew L. Kronisch to All Employees, Detailees, and Contractors 
Supporting the Office of Intelligence and Analysis, "SUBJECT: Interim Intelligence Oversight Procedures for the 
Office of Intelligence & Analysis," (4/3/2008) DHS-HSGAC-FC-047637. 



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The Subcommittee investigation found, however, that DHS had retained the cancelled 
draft HIRs for a year or more after the date of their cancellation, and appeared to have no process 
to purge such inappropriate reporting from their systems. It was not clear why, if DHS had 
determined that the reports were improper to disseminate, the reports were proper to store 
indefinitely. 

Asked why it was legal for the department to retain reports on U.S. persons that may 
improperly report on protected activities, DHS responded that "while a draft HIR or IIR may be 
cancelled based upon a determination that its publication would be outside the scope of I&A's 
mission, and, by extension, I&A's obligations under the Privacy Act, the cancelled document 
may be retained by I&A for administrative purposes such as audit and oversight." 

While auditing and oversight may qualify as legitimate "administrative purposes," 
several concerns arise regarding the Department's assertion that they form a reasonable basis for 
retaining the cancelled HIRs. 

First, as noted by CRS counsel who examined the issue on behalf of the Subcommittee, 
the department's own requirement to destroy inappropriate records appears to contradict its 

293 

justification for retaining them. If the reports were considered inappropriate to disseminate 
due to civil liberties concerns, as the cancellation comments indicate, it is not clear how they are 
then appropriate to keep. "There also seems to be some inconsistency with the requirement for 
[DHS] document holders to destroy U.S. person information once he or she deems it to fall 
outside the guidelines; nothing in the guidelines explains how I&A personnel are to know which 
records are subject to audit rather than destruction or minimization, or what to do with records 
once it has been determined they should be held for audit." 294 

Second, the department's intelligence oversight guidelines include a list of documents it 
considers proper for retention as "administrative information." That list includes "personnel and 
training records, reference materials, contractor performance records, public and legislative 
affairs files, and correspondence files." It does not include intelligence reports, nor does it 
mention auditing as an administrative purpose. 

Third, DHS has no policy or practice of auditing its HIR reports. The internal November 
2010 HIR Working Group (HIRWG) study concluded DHS had no formal auditing procedure for 
HIRs. "HIRWG found no record of any audits or studies of previous HIR releases, cancellations 
or tracking of substantive edits," the report stated. "The HIRWG recommends establishing a 
post-release audit process whereby HIRs could be systematically evaluated ... to ensure proper 
adherence to the reporting thresholds, legal requirements, reporting quality and timeliness." 296 



i9i DHS response to Subcommittee inquiry (6/2012), DHS-HSGAC-FC-57026. 

293 CRS memorandum from Jennifer Elsea and Gina Stevens to the Subcommittee, "Subject: DHS'S Intelligence and 
Analysis Information Collection Practices," (9/26/2012), at 8. 

294 Id. 

295 Id. 

296 "Homeland Intelligence Report Working Group (HIRWG) Phase 1 Report and Recommendations," (11/2010), at 
2, DHS-HSGAC-FC-050770. 



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As of July 2012, it still lacked such a process. "I want to say next fiscal year, we will 
start that process," Chuck Robinson, Deputy Director of I&A's Collection and Requirements 
Division, told the Subcommittee. "There is a draft plan. It has not been approved yet." With 
no policy or practice for auditing its intelligence reporting, DHS's claim that it is retaining 
cancelled HIRs for auditing purposes is troubling. 

In addition, when the Subcommittee requested copies of the cancelled draft HIRs as part 
of its oversight investigation, the Department initially sought to withhold the documents, 
explaining it was concerned about the effects of oversight on its reporting process: 

For drafts and cancelled HIRs, it would be helpful if you could articulate 
why the committee needs this information to further its oversight .... We 
believe it is important to protect the integrity of the process by which those 
reports are reviewed and subjected to internal editorial, analytic, legal, and 
operational scrutiny prior to publication decisions, so as not to impede 
officers in the field from reporting appropriately on topics of interest and 
importance to homeland and national security. Moreover, this could have a 
significant chilling effect on the quality of the reporting that ultimately is 
published and, as a result, the agency decisions it is intended to inform. 

These concerns are puzzling, given DHS's claim that the sole reason it is retaining the 
cancelled HIRs is for audit and oversight purposes. The apparent indefinite retention of 
cancelled intelligence reports that were determined to have raised privacy or civil liberties 
concerns appears contrary to DHS's own policies and the Privacy Act. 

K. Problems with DHS Reporting Acknowledged, But Unresolved 

Despite multiple memoranda and internal reviews which identified problems and made 
recommendations to fix DHS's intelligence reporting processes at fusion centers, 299 problems 
appear to remain. Some have been addressed. For instance, DHS officials have stated they no 
longer suffer from understaffing within the Reporting Branch, which slowed the process. 3 In 
addition, the Department has shifted from using an ad hoc method involving Microsoft Word and 
unclassified email accounts to draft and share intelligence reports, to using a Department of 
Defense system and a secure network. 

Other issues remain. For example, DHS officials who report intelligence from fusion 
centers still do not appear to be evaluated on the quality of their reporting, a problem flagged by 

301 " 4 

Mr. Chaparro in January 2010. DHS also has not yet successfully instituted a more 



Subcommittee interview of Charles Robinson (7/18/2012). 
298 Email from DHS to the Subcommittee, "Subject: Fusion Centers," (7/15/2011) PSI-DHS -72-000001. 
299 See "Homeland Intelligence Report Working Group (HIRWG) Phase 1 Report and Recommendations, November 
2010," DHS-HSGAC-FC-05770; 1/7/2010 memorandum from James Chaparro to Bart Johnson, "Homeland 
Intelligence Reports (HIRs)," DHS-HSGAC-FC-050742; Memorandum from Philip Graven to James Chaparro, 
"Subject: The Fiscal Year 2009 4 th Quarter Management Report" (12/30/2009), DHS-HSGAC-FC-058860. 

300 Subcommittee interview of Charles Robinson (7/18/2012). 

301 Memorandum from James Chaparro to Bart Johnson, "Subject: Homeland Intelligence Reports (HIRs)" 
(1/7/2010), DHS-HSGAC-FC-050742. 



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substantive training program or finalized a certification process for its reporting officials, an 
issue noted by Ms. Alexander in 2009, Mr. Chaparro in January 2010, and by Ms. Kardell's 
group in November 2010, although a pilot training program is being tested. 

As of July 2012, more than 18 months after Ms. Kardell's HIR Working Group made its 
recommendations (and more than a year after Undersecretary Wagner approved them), some of 
the most important, including the recommendation to improve training, remain incomplete. In 
addition, DHS has not yet finalized Standard Operating Procedures for the Reporting Branch to 

302 

reflect procedures it currently follows, which Kardell's group recommended. DHS has also 

303 

failed to institute a process to review or audit its own intelligence reporting, a problem which 
the HIR Working Group found "significantly complicates efforts to establish metrics for 
production, quality, cancellations, or reporting problems, and impedes the identification of best 
practices." 304 



Subcommittee interview of Charles Robinson (7/18/2012). 

303 Id. 

304 "Homeland Intelligence Report Working Group (HIRWG) Phase 1 Report and Recommendations, November 
2010," DHS-HSGAC-FC-05770, at 2. 



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V. DHS DOES NOT ADEQUATELY OVERSEE ITS FINANCIAL SUPPORT 
FOR FUSION CENTERS 



• DHS does not know how much it has spent to support fusion centers. 

• DHS does not exercise effective oversight of grant funds intended for fusion centers. 

• FEMA monitoring visits do not confirm grant funds are used appropriately. 

• Federally required A-133 audits are not useful to monitor grant spending. 

• DHS grant requirements do not ensure states spend fusion center funds effectively. 

• DHS cannot say whether its spending has improved fusion centers' ability to participate 
meaningfully in the federal counterterrorism mission. 



A. Overview 

For most of its history, DHS has largely been unable to account for its spending in 
support of state and local fusion centers. Its recent efforts to fix the problem have fallen short. 

DHS spending in support of fusion centers can be divided into two general categories: 
funds it spends on its own personnel and programs which interact with and provide operational 
support to fusion centers; and grant funds it awards to states and urban areas, with the intention 
that they will spend the money on their fusion centers. 

This year, for the first time, DHS estimated what it spent on the first category - $17.2 

305 

million in 201 1. However, DHS remains unable to provide an accurate accounting of 
spending in the second category. DHS cannot say with accuracy how much grant funding it has 
awarded to support fusion centers, how that money was spent, or whether any of it improved 
fusion centers' ability to participate meaningfully in counterterrorism information-sharing with 
the federal government. 

In a series of estimates it provided the Subcommittee, DHS said it has awarded between 
$289 million and $1.4 billion in grant funding to states and cities to support fusion centers and 
related efforts between 2003 and 20 10. 306 These estimates differ by more than $1 billion, 
making them of questionable use. The Subcommittee investigation also found weaknesses in the 
grant award process, grant monitoring, and DHS's ability to assess the impact of those funds. 

The Subcommittee investigation also reviewed expenditures by select state and local 
agencies on behalf of fusion centers around the country between 2006 and 2010. The review 
found that state and local agencies did not consistently spend federal grant dollars on items that 
would directly improve their ability to contribute to the federal counterterrorism effort. Instead, 
they spent DHS funds intended for fusion centers on vehicles, surveillance equipment, and even 
significant overhead costs like rent, which did little to improve their core intelligence analysis 



im "201 1 Fusion Center Federal Cost Inventory: Results" (6/2012), at 9. 

306 Figures are based on FEMA estimates: "Fusion Center Funding Report," Spreadsheet, 6/22/2012, DHS HSGAC 
FC 058336 and "Fusion Keyword Search Solution Area Funding Report," Spreadsheet 2/24/2010, DHS HSGAC FC 
057017 at 2. 



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and sharing capabilities. Yet, all of those expenditures were allowable under the guidance which 
existed at the time, and would not have been questioned by DHS officials overseeing the grant 
program, officials told the Subcommittee. 

In 201 1 and 2012, DHS attempted to tighten its oversight of funding for fusion centers by 
requiring states to document how they intended to use FEMA preparedness grant funds to 

307 

improve fusion centers' "must-have" information- sharing capabilities. DHS officials said 
they expect that will help align its fusion center funding efforts, managed by FEMA, with its 
intelligence priorities for fusion centers, managed by its Office of Intelligence and Analysis 
(I&A). But as the Subcommittee investigation found, these new rules and processes do not fix 
the fundamental problems with how FEMA funds state and local fusion center efforts: they do 
not ensure states and cities spend the money wisely, nor do they significantly improve FEMA's 
ability to track the amount of federal funds actually spent on supporting fusion centers. 

To assess the return on any program, one must know how much one has invested, how 
those funds were applied, and what goals the funding is intended to help achieve. However, 
DHS cannot identify how much it has spent intending to support fusion centers, nor has it 
examined how the bulk of that money has been used. As a result, DHS is unable to identify what 
value, if any, it has received from its outlays. 

B. DHS Does Not Know How Much It Has Spent 
to Support Fusion Centers 

FEMA officials told the Subcommittee that they do not have a mechanism to accurately 
and reliably identify the total amount of DHS grant funding spent on supporting fusion 

308 309 

centers, despite increasingly identifying fusion centers as a departmental priority. 

FEMA has not deemed fusion centers to be a separate mandatory category for tracking 
the expenditures of federal grant funds. Instead, it has required states to submit Biannual 
Strategy Implementation Reports (BSIR) which relay general updates of how the state is 
spending DHS funds, on fusion centers and other projects. 

FEMA officials told the Subcommittee that the only way to estimate grant funding 
directed towards fusion centers was to perform a keyword search using project descriptions 

310 

found in the BSIRs. u As FEMA officials noted in a briefing to the Subcommittee, such a search 
relies on data that are self-reported by those agencies (known by FEMA as "State Administrative 
Agencies," or SAAs), and changing the way in which search terms are applied can have a 

311 

substantial impact on the results returned. 



For a list of those capabilities, please see Appendix B of this Subcommittee report. 

308 Subcommittee interview of FEMA officials (6/14/2012). 

309 In 2009, DHS elevated fusion centers to "national priority" status in the grant program guidance; in 2010, 201 1, 
and 2012, DHS identified fusion centers as one of its highest priorities. FEMA response to Subcommittee inquiry; 
DHS-HSGAC-FC-057 1 1 5 . 

310 Subcommittee interview of FEMA (6/14/2012). 

311 Id.; Briefing "FEMA Preparedness Grant Funding for Fusion Centers," FEMA/Grants Program Directorate 
(6/14/2012). 



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Initially, FEMA officials conducted a broad search of the BSIR data, using terms like 
"fusion," "information sharing" and "data collection," that yielded an estimate $1.4 billion from 
2003-2010, including $719 million in grant funding for fiscal years 2007-2009. 312 FEMA 
subsequently conducted a more narrow, revised search using only the term "fusion center" of the 
same data and yielded an estimate of $222 million for the 2007-2009 period. 313 The two 
estimates of federal funding of fusion centers from 2007 to 2009 differed by nearly half a billion 
dollars. 

In addition to requesting data from FEMA, in 2010, the Subcommittee requested 
information from every state and local fusion center on the amount of federal funding, by source, 
each fusion center received for years 2007 through 2009. 3 14 Where possible, the Subcommittee 
compared the funding figures provided by fusion centers to those FEMA provided for the same 
centers. The Subcommittee found that the fusion centers' responses differed significantly from 

315 

both sets of data provided by FEMA. For instance, the Vermont Fusion Center indicated that 
it received no federal funding in 2007, 2008, or 2009, although data from FEMA identified 
between $1.2 and $1.6 million in funding for the same time period. 316 The Minnesota Joint 
Analytical Center reported receiving $4.3 million in federal funding, while FEMA reported 
between $2.3 and $7.3 million in funding. 317 These two examples show the FEMA figures could 
vary substantially from than the state estimates. The variability casts doubt on the accuracy and 
reliability of FEMA's data. 

Because of a lack of specificity in FEMA's data or differences in the survey responses 
provided by the fusion centers, the Subcommittee investigation was able to compare FEMA's 
figures with those of only 29 fusion centers. It was unable to compare figures for fusion centers 
in states which had more than one center, since FEMA's BSIR data contains estimates of 
aggregate spending on fusion centers in a given state, and not spending on specific fusion 
centers. Thus the Subcommittee's analysis was limited to only those instances in which a state 
had only one recognized fusion center. 

Of that group, only a small number of centers identified a total funding amount within 
10% of FEMA's estimates for the 2007-2009 time period. The remaining 30 fusion centers 
identified funding amounts that differed, in some cases significantly, from FEMA's data. 

FEMA officials acknowledged the limitations of the keyword- search approach used to 
identify fusion center funding, stating that it likely did not accurately capture all of the DHS 
funding supporting fusion centers. FEMA officials also acknowledged that grants for broader 
information-sharing efforts by states and localities may also assist fusion centers, although those 



312 "Fusion Keyword Search Solution Area Funding Report," Spreadsheet 2/24/2010, DHS HSGAC FC 057017 at 2. 

313 "Fusion Center Funding Report," Spreadsheet, 6/22/2012, DHS HSGAC FC 058336. 

314 At the time, DHS said it recognized 72 state and local fusion centers. 

315 In some cases, centers' responses did not consistently distinguish DHS funding from other federal sources. 

316 Comparison of June 2011 Biannual Strategy Implementation Report data; DHS HSGAC FC 05833-058340; 
"Information Sharing and Fusion Center Funding" (12/3/2010); and Vermont Fusion Center response to 
Subcommittee survey; Vermont Fusion Center 01-0001. 

317 Comparison of June 201 1 Biannual Strategy Implementation Report data; DHS HSGAC FC 05833-058340; 
"Information Sharing and Fusion Center Funding" (12/3/2010); and Minnesota Joint Analysis Center response to 
Subcommittee survey; PSI-Minnesota Joint Analysis Center 01-0001 at 2. 



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items may not be identified in a keyword search, because they might not specifically contain 

318 

"fusion center" or related terms in their descriptions. FEMA officials stated that they were 
planning to implement a change in the BSIR reporting process by which SAA's will be asked to 
indicate with a "yes/no" response whether funding for a specific project is supporting a fusion 

319 

center. While such a change may reduce FEMA's reliance on performing a keyword search to 
identify grant funding to fusion centers, it remains dependent on self -reported information from 

390 

the recipient agencies, which FEMA officials concede may not be accurate. 

C. DHS Does Not Exercise Effective Oversight of Grant Funds 
Intended for Fusion Centers 

In 2010, DHS told auditors from the Government Accountability Office (GAO) it "had 
plans to assess the costs of the fusion center network," but it has yet to do such a comprehensive 

32 1 

assessment. Without an accurate tally of the amount of federal funds supporting each fusion 
center, FEMA, I&A and DHS not only fail to accurately track federal spending, but also remain 
unable to determine whether its investments are helping to meet the federal mission in a cost- 
effective manner. 

While the Subcommittee investigation focused on grant funds intended to support state 
and local fusion centers, FEMA's inability to effectively monitor state and local grant spending 
affects its oversight of all preparedness grant funding it distributes. 

The Department of Homeland Security's Inspector General stated flatly in a June 2012 
report that, despite distributing over $800 million annually for state and local preparedness 
efforts: "FEMA did not have a system in place to determine the extent that Homeland Security 
Grant Program funds enhanced the states' capabilities to prevent, deter, respond to, and recover 

399 

from terrorist attacks, major disasters, and other emergencies." 

Although FEMA did not determine whether states and localities had effectively spent the 
FEMA grant funds they received, that did not relieve the agency of the statutory obligation to 
continue to distribute DHS grant funds to the states under a mandatory formula specifying 

323 

minimum state grants for preparedness. 



Subcommittee interview of FEMA (6/14/2012). 



321 GAO, Information Sharing: Federal Agencies Are Helping Fusion Centers Build and Sustain Capabilities, and 
Protect Privacy, but Could Better Measure Results, GAO-10-972 (Washington D.C.: September 2010), at 14. In 
late 201 1, DHS attempted to conduct a cost assessment of federal support to fusion centers, however it was unable to 
include financial figures for FEMA grant funding to fusion centers, which, by FEMA estimates, is a greater federal 
cost than the operational items (for example personnel, technology, security clearances and network connectivity) in 
the DHS 201 1 cost assessment. 6/2012, "201 1 Fusion Center Federal Cost Inventory: Results," DHS; "Fusion 
Center Funding Report," Spreadsheet, 6/22/2012, DHS HSGAC FC 058336 and "Fusion Keyword Search Solution 
Area Funding Report," Spreadsheet 2/24/201, DHS HSGAC FC 057017 at 2. 

322 '"-pjjg p e( jeral Emergency Management Agency's Requirements for Reporting Homeland Security Grant Program 
Achievements,"OIG- 12-92 (6/2012), http://www.oig.dhs.gov/assets/Mgmt/2012/OIG 12-92 Junl2.pdf . 

323 Id. at 9. 



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To oversee grant spending, including spending on fusion centers, FEMA relies on two 
mechanisms. First are FEMA grant monitoring reports, which are biennial reviews based on site 

324 

visits by FEMA officials. Second are grantee self-audits, known colloquially as "A- 133s," 
after the Office of Management and Budget (OMB) circular requiring them. According to GAO, 
neither report is a sufficient tool for meaningful oversight. 



(1) FEMA Monitoring Reports 



Currently, every two years, FEMA officials visit grant recipients and prepare monitoring 
reports based on those visits. 326 FEMA is required by law to conduct monitoring visits, but 
officials expressed a lack of faith in both the monitoring visits as well as the reports they 
produced. "I am not satisfied that our programmatic monitoring is as strong as it could be," said 

327 

Elizabeth Harman, the FEMA Assistant Administrator in charge of its grants programs. Until 
recently the monitoring visits were supposed to evaluate FEMA-funded projects against 
milestones the states promised to achieve with the money FEMA gave them. However, Matthew 
Bower, Branch Chief, Risk Analytics and Strategic Initiatives, FEMA/GPD/Preparedness Grants 
Division, noted that a FEMA monitoring visit likely would not involve the FEMA official 
physically confirming a state agency's claim that it had achieved any specific milestone. 

Just because a FEMA official reports a milestone was achieved, "we are not viewing the 

328 *~ 

capability" firsthand, Mr. Bowers said. Even if a FEMA official rated a project milestone at 
100 percent, indicating it was fully achieved, he might not base that on having personally 
verified the claim. "[That] may not mean we 'kicked the tires' on any of this stuff," Mr. Bower 
told the Subcommittee/ Despite that, Mr. Bower said the visits were important "to make sure 
projects are on track." 330 

Recently, the DHS Inspector General's Office examined FEMA's monitoring efforts. It 
reported that state officials told them FEMA's monitoring visits "do not include reviewing the 
state's progress in achieving annually identified investment project milestones." 

The Subcommittee investigation noted one particular case in which a FEMA monitoring 
official rated a fusion center project as having made no progress - zero percent - for certain 
milestones, yet FEMA continued to award grant funds for the project. Mr. Bower told the 



" Subcommittee interview of Elizabeth Harman, Assistant Administrator, DHS Grants Program Directorate 
(8/2/2012). 

325 See "Testimony: DHS Improved its Risk-Based Grant Programs' Allocation and Management Methods, But 
Measuring Programs' Impact on National Capabilities Remains a Challenge" (3/1 1/2008), prepared by GAO, GAO- 
08-488T; "Single Audit Improvements" (3/13/2009), prepared by GAO, GAO-09-307R. 

32 The visits and reports have changed over time, and FEMA officials indicated they are preparing to make further 
changes. Subcommittee interviews of Elizabeth Harman (8/2/2012) and FEMA officials (7/19/2012). 

327 Subcommittee interview of Elizabeth Harman (8/2/2012). 

328 Subcommittee interview of FEMA officials (7/19/2012). 

329 Id. 

330 Id. 

331 "The Federal Emergency Management Agency's Requirements for Reporting Homeland Security Grant Program 
Achie vements,"OIG- 1 2-92 (6/27/20 1 2) . 

332 "p n ii ac jelphia Urban Area FY 2009 Monitoring Report" (9/17/2009), FEMA; "Programmatic Monitoring Report, 
Pennsylvania - Philadelphia Area, HSGP/UASI," (10/18/201 1), FEMA, DHS-HSGAC-FC-059194. 



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Subcommittee that was possible because, among other reasons, FEMA had no "formal process" 
to review a recipient's monitoring reports as part of its grant award process. Mr. Bower said that 
it was "common" for FEMA to continue to award funding to projects which showed no progress 

333 

on previous years' monitoring reports/ ~ "Past performance does not affect future awards," Mr. 
Bower explained at one point. 

When asked how long a project must show no progress before FEMA questioned its 
funding, Bower said he would expect FEMA officials to raise questions if a project had received 
funding for three consecutive years and showed zero percent progress on any milestone for that 
three-year period. 335 

In its June 2012 report, the DHS IG criticized FEMA's monitoring program and the 
reports it generated for producing dated information of little value. "Our review of monitoring 
reports supported that the reports were not a source for tracking milestone progress," the IG 
stated. The IG said the visits were too rare, and reports filed too late, to be of any practical use. 
"With monitoring visits scheduled every two years, and the monitoring reports not being 
completed for several months following the visit, the results of the visits were not timely or 
current for reviewing project activity accomplishments when annual applications for grant 
awards were being reviewed." 336 

These findings echo what GAO found in 2008. "[FEMA] monitoring of grant 
expenditures does not provide a means to measure the achievement of desired program 

337 

outcomes," GAO reported then/ Ms. Harman told the Subcommittee, four years after the 
GAO report, that her staff was currently researching how to improve the monitoring process for 

338 

FEMA grants. However, Ms. Harman noted, "As the federal government, it's not our job to 
micromanage these funds," she said. "We need to maintain a level of flexibility." 

Delaware Valley Intelligence Center (DVIC). The Subcommittee investigation, in 
addition to reviewing FEMA mechanisms for tracking federal grants funds spent on fusion 
centers generally, also examined FEMA monitoring reports for specific fusion centers. One that 
highlighted the weakness in the monitoring reports process involved a fusion center project in 
Philadelphia, known as the Delaware Valley Intelligence Center (DVIC) project. 

The Southeastern Pennsylvania Regional Task Force (SEPARTF), the regional 
government coalition which manages the project, identified over $11 million in FEMA funding 



333 Subcommittee interview of FEMA officials (7/19/2012). 

334 Id. 

335 Id. 

33 "The Federal Emergency Management Agency's Requirements for Reporting Homeland Security Grant Program 
Achievements,"OIG- 12-92, at 9, (6/27/2012), http://www.oig.dhs.gov/assets/Mgmt/2012/OIG 12-92 Junl2.pdf . 
337 DHS Improved its Risk-Based Grant Programs' Allocation and Management Methods, But Measuring Programs' 
Impact on National Capabilities Remains a Challenge," GAO-08-488T, at 5, 
http://www.gao.gOv/assets/120/l 19323.pdf . 
338 Subcommittee interview of Elizabeth Harman (8/20/12). 
339 Id. 



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that has been committed to the DVIC project since 2006. According to SEPARTF, the DVIC 
will employ over 130 personnel in a 24-hour-a-day, 7-days-a-week operation. 341 

In September 2009, a FEMA grant officer visited SEPARTF to conduct a grant 
monitoring site visit/ Despite FEMA's multi-million-dollar obligations to the center over a 
three-year period, the FEMA officer did not visit the actual location of the DVIC as part of the 
site visit. FEMA could not conduct a site visit of the fusion center itself, because despite years 
of grant funding, the center did not physically exist. 

In 2009, the FEMA officer reviewed the promises the task force had made regarding the 
progress it would make on DVIC in 2008, when FEMA had awarded it $2.6 million. 43 The 
FEMA officer determined that no progress had been made on any of them - including what may 
have been the most fundamental: "Establish the DVIC facility and provide contractors and staff 
to operate the fusion center." 344 Three years and $11 million in obligations, yet the center did 
not exist. 

"Milestones shows [sic] zero progress," the official noted in the 2009 monitoring report, 
but appeared to excuse the task force's inaction. "When the monitoring was conducted it was 
very early in the Grant cycle and the Grantees and Sub-recipients were in the process of 
obligating funds and initiating projects." 345 Despite finding no progress in 2009, FEMA 
continued to direct funding to the project in 2010 and 201 1. 46 

In October 201 1, a FEMA official conducted the next site visit to Philadelphia. This 
monitoring visit took place five years after FEMA's initial grant to DVIC in 2006. By that time, 
the Commonwealth of Pennsylvania had frozen the FEMA grant funds it held that were intended 
for the center, because of concern that the local officials in charge of the project were planning to 
improperly spend millions in FEMA funding to refurbish and equip an old industrial building to 
house not only DVIC, but an even larger criminal intelligence center for the Philadelphia Police 
Department. FEMA grant guidance and federal law prohibit the use of grant funds for 

348 

construction. In addition, expenditures for non-fusion center needs would have gone against 
the task force's promises to use the funds exclusively for the fusion center. 349 State officials were 



34U DVIC Funding Overview, SEPARTF; PSI-PEMA-05-0090. 

341 Response to Subcommittee questionnaire (7/23/2010), Delaware Valley Intelligence Center, PSI-Delaware 
Valley Intelligence Center-0 1-0001. 

342 The task force is a subgrantee of the state of Pennsylvania; it receives, allots and spends FEMA grant funds for 
the Philadelphia region. 

343 "Philadelphia Urban Area FY 2009 Monitoring Report" (9/17/2009), FEMA, at 21; DVIC Funding Overview, 
SEPARTF; PSI-PEMA-05-0090. 

344 "Philadelphia Urban Area FY 2009 Monitoring Report" (9/17/2009), FEMA, at 21. 

345 Id. 

346 "Programmatic Monitoring Report, Pennsylvania - Philadelphia Area, HSGP/UASI" (10/18/201 1), FEMA, 
DHS-HSGAC-FC-059194; Grant Agreement Between PEMA and SEPARTF for FEMA FFY 2010 UASI funds, 
(6/10/201 1), at 37; "FY201 1 HSGP Investment Justification: Fusion Center Addendum," at 2. 

347 "Programmatic Monitoring Report, Pennsylvania - Philadelphia Area, HSGP/UASI" (10/18/201 1), FEMA, 
DHS-HSGAC-FC-059194. 

348 6 U.S.C. § 609 (b)(4). 

349 Correspondence from Christopher F. Wilson, Pennsylvania Governor's Office of General Counsel, to Edward 
Atkins, Chair, Southeastern Pennsylvania Regional Task Force (9/15/2011), PSI-PEMA-05-0003. The 



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so concerned they told SEPARTF that they would not reimburse any construction costs related to 
the DVIC until FEMA granted a waiver to do so. 

FEMA officials were aware of these concerns at the time of the visit - indeed, according 
to state officials, FEMA shared their doubts. Specifically, FEMA officials knew that project 
officials planned to use FEMA grant funds to pay for building renovations, which was explicitly 

35 1 

barred by FEMA grant guidelines. Just a few weeks earlier, local officials had written FEMA 
asking for an "immediate and favorable" decision to waive that restriction so that the project 

352 

"may proceed along its current promised timeline." 

Despite local officials' efforts to get around FEMA spending restrictions and allocate 
millions of taxpayer dollars to disallowed construction and renovation costs, the FEMA 
monitoring report from the October 201 1 visit contained no particular criticisms or sense of 
urgency regarding the fusion center. For instance, the report form asked: "During the course of 
the programmatic Site Visit, were there indicators of possible non-compliance with grant 



Subcommittee investigation discovered that a DHS official, Joseph Liciardello, served as one of the DVIC project's 
managers, outside of his professional capacity as a DHS employee. ("I am the Co-Lead on the [DVIC] Project 
Management Team." Email from Joseph Liciardello to ISC@DHS.gov, "Subject: Request for documents" 
(9/23/2010), DHS-HSGAC-FC-020104.) He assisted in crafting documents and providing advice for the project and 
seemed to be counseling the project on how to recharacterize construction costs they intended to cover using grant 
funds: ("I . . . am handling the lease negotiations for the DVIC for most of the week." Email from Joseph 
Liciardello to Kurt Bittner, "Subject: RE: DVIC - Siemens Contact Information," (10/1 1/10), DHS-HSGAC-FC- 
022630; "We cannot reference construction so I added 'or additional funding as necessary' to . . . the enhanced lease 
payment clause." Email from Joseph Liciardello to Evalyn Fisher, "Subject: FW: DVIC Lease" (10/5/2010), DHS- 
HSGAC-FC -024159; "As to the request for a change from SEPARTF 'construction' to 'require me nts['], it is 
necessary because of restrictions found in the grant guidance concerning allowable costs." Email from Joseph 
Liciardello to Douglas Kubinski, "Subject: RE: DVIC Intergovernmental Cooperation Agreement between the City 
and Task Force" (2/17/2011), DHS-HSGAC-FC-023663). 

In interviews with the Subcommittee, Mr. Liciardello said he never referred to himself as a project lead for 
DVIC, and that his role was "administrative," and "assistance." He said he was versed in the lease process but only 
because he was a "referee" between the parties. Subcommittee interviews of Joseph Liciardello (10/31/1 1 and 
11/2/11). 

The Subcommittee was unable to confirm the extent of Mr. Liciardello's role in the project, in part because 
DHS did not produce all emails from his account related to his extra-professional involvement the project. In a 
written explanation, the Department stated, "our technological representatives were unable to access" emails from 
May and June 201 1. Response to Subcommittee inquiry, DHS, DHS -HSG AC -FC -059294. 

350 "Issues were first raised regarding the construction issue in late February 201 1," PEMA officials told the 
Subcommittee. "They rose to DHS' level ... we have an April 26, 201 1 note from Dennis Donehoo [of FEMA] 
requiring a [construction] waiver." Subcommittee interview of Pennsylvania Emergency Management Agency 
officials (11/14/2011). 

351 "The Federal Emergency Management Agency (FEMA) has asked PEMA for the status of the 
construction/renovation waiver as federal guidance requires such a waiver .... PEMA will be unable to reimburse 
the SEPARTF for any expenditure related to the DVIC until such a time that SEPARTF submits a 
construction/renovation waiver to PEMA and that waiver is consequently approved by FEMA[.]" Correspondence 
from Christopher F. Wilson, Chief Counsel, Governor of the Commonwealth of Pennsylvania, to Ed Atkins, 
Chairperson, Southeastern Pennsylvania Regional Task Force (9/15/201 1), PSI-050-0004. 

352 Correspondence from Edward J. Atkins, Chairman, Southeastern Pennsylvania Regional Task Force, to Dennis 
Donehoo, Program Analyst, FEMA (9/26/201 1), PSI-PEMA-05-0012. FEMA did not grant the waiver. 



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program requirements (e.g., unallowable expenditures) that should be brought to the financial 
analyst's attention?" The FEMA officer wrote, "No." 353 

As for progress, the official noted that work on the center was "not started," except for a 
segment of funds from a 2008 grant, which the official noted were "used for a temporary facility 
while the perm[a]n[e]nt DVIC is under construction." In that instance, the official recorded that 
"all investment activities" had been "completed." 354 

In February 2012, SEPARTF informed FEMA that it expected to use 2000 square feet of 

355 

office space "for pre-operational activities related to establishment of the DVIC." In August 
2012, Pennsylvania officials told the Subcommittee they understand that SEPARTF had yet to 
hire any intelligence analysts. 356 To date, about $2.3 million of FEMA funds committed to the 

357 

project have been spent/ The remainder of the grant funds has expired, been redirected to 

358 

other projects, or remain unspent. DHS continues to list DVIC as one of its officially 
recognized fusion centers in reports to Congress and public documents, even though after six 

a eg 

years, the fusion center is not yet operational. 

FEMA's passivity in the face of years of questionable fusion center expenditures in 
Philadelphia is remarkable, but it is not exceptional. Fusion center grant recipients that have 
earned reputations among FEMA grant officials for poor spending practices typically face few 
consequences. FEMA officials told the Subcommittee that while they sometimes find instances 
of misspending, lax recordkeeping or other poor performance by grant recipients - on fusion 
centers and other projects - they almost never withhold funds. 360 In fact, FEMA officials could 
name only a few instances in which DHS withheld grant money from any grant recipient in any 
DHS program. In 2007, FEMA withheld grant funds from American Samoa in response to a 
major investigation into the misuse of millions in DHS grant funds for tsunami preparedness by 
the protectorate. 361 FEMA officials also indicated that they temporarily withheld funds from 
Pennsylvania and Texas that were to be used to support fusion center activities, because the 
states did not provide enough information in their applications about how the funds were going 
to be used. 362 



333 "Programmatic Monitoring Report, Pennsylvania - Philadelphia Area, HSGP/UASI," FEMA, DHS-HSGAC-FC- 
059194. 

354 Id. at 18. 

355 Letter from Edward J. Atkins, Chairman, SEPARTF to Dennis Donehoo, FEMA (2/23/2012), DHS-HSGAC-FC- 
05-0796. 

356 Subcommittee interview of Pennsylvania Emergency Management Agency officials (8/1/2012). 

357 PEMA Spreadsheet. (9/20/12) 

358 DVIC Funding Overview, SEPARTF; PSI-PEMA-05-0090; Subcommittee interview of Pennsylvania Emergency 
Management Agency officials (8/1/2012). 

359 See "2011 National Network of Fusion Centers, Final Report, May 2012," DHS-HSGAC-FC-057027. 

360 Subcommittee interview of FEMA officials (6/14/2012). 

361 See "Report: Tsunami warning funds squandered in American Samoa," CNN.com, Drew Griffin and David 
Fitzpatrick (10/28/2009), 

http://edition.cnn.com/2009/WORLD/americas/10/27/asamoa.tsunami.warningsystem/index.html . 

362 Subcommittee interview of FEMA officials (6/14/2012). 



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(2) A-133 Audits 

The Office of Management and Budget (OMB) requires state, local and tribal 
governments who expend more than $500,000 in federal grant funds within a given fiscal year to 
audit their expenditure of those funds, as well as to conduct timely and effective oversight of any 
subgrantees' financial activities, through actions such as site visits. 363 

The process has long been problematic, as GAO and the President's Council on Integrity 
and Efficiency (PCIE) have reported. 364 The Subcommittee investigation reviewed A-133 audits 
of FEMA grant funds awarded to California, Arizona and Pennsylvania, and determined the 
audit reports did not follow a uniform reporting format, and often did not distinguish 
expenditures for fusion centers from other programs, rendering them useless for effective 
financial oversight of how state and local agencies spend federal grant dollars on fusion centers. 

The difficulties experienced by the Subcommittee in using A-133 audit reports is 
consistent with broader concerns raised by earlier reviews of A-133s. In 2007, PCIE reported 
that nearly half of all A-133 audits were not adequate to meet the reporting requirements of the 
OMB circular - so much so that it considered them either wholly unacceptable or "limited in 
reliability." The council also pointed out that there has been no single federal entity responsible 
for monitoring compliance with the A-133 audit requirement, and agencies were not consistent in 
enforcing it. 365 

The A-133 audits conducted by California illustrate the problems. In 2009, the DHS 
Inspector General released its audit of the State of California' s management of its State 
Homeland Security Program (SHSP) grants from 2004 to 2006. Among other findings, the DHS 
IG found that the state had failed to conduct any monitoring of the spending by its subgrantees 
until late 2005, and when it did, the review efforts were inadequate to provide "sufficient 
oversight" of the subgrantees' activities. Among other problems, nearly half of the subgrantees 
received no visits at all from state overseers, and the audits did not identify any procurement- 
related problems, although the IG's auditors found many. In fact, the IG found that "in an effort 
to improve operational efficiency," the state did not require subgrantees to give them any 
receipts, invoices or other documentation before disbursing federal grant funds to them. 366 

Among its recommendations, the DHS IG informed California it should strengthen its 
site visits to subgrantees, and improve its financial oversight measures to ensure the subgrantees 
were spending federal grant funds "as intended." The state agreed to do so. 367 



j6, "OMB Circular A-133 Compliance Supplement 2011," Part 1, 

http://www.whitehouse.gov/sites/default/files/omb/assets/OMB/circulars/al33 compliance/201 1/ptl.pdf . 
364 See "Single Audit: Opportunities Exist to Improve the Single Audit Process and Oversight," (3/13/2009), 
prepared by GAO, GAO-09-307R, http://www.gao.gov/new.items/d09307r.pdf . 

365 "Report on National Single Audit Sampling Project" (6/2007), President's Council on Integrity and Efficiency, 
http://www.ignet.gov/pande/audit/NatSamProiRptFINAL2.pdf . 

366 "The State of California's Management of State Homeland Security Program Grants Awarded During Fiscal 
Years 2004 through 2006," prepared by DHS IG, (2/2009) OIG-09-33, 
http://ipv6.dhs.gov/xoig/assets/mgmtrpts/OIG 09-33 Feb09.pdf . 



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In 201 1, the DHS IG revisited the State of California's grant operations, this time to 
review its management of Urban Area Security Initiative (UASI) grants, another subset of 
FEMA's preparedness grants program. In its report, the IG noted the state was required by OMB 
Circular A-133 to monitor subgrantee spending through site visits and other means. It noted it 
had found an absence of meaningful financial oversight by California two years earlier. It noted 
the state of California had promised to improve its monitoring, including boosting its site visits, 
to comply with federal regulations. 368 

California officials told IG auditors they planned to initiate visits to subgrantees in three 
of the state's six urban areas receiving UASI funds from 2006 and 2007. The IG pointed out that 
left subgrantees in the other three areas unaffected, and held little promise of ensuring fiscal 
discipline, since nearly all of the 2006 and 2007 grant funds would have been spent and 
reimbursed by then. 369 

The Subcommittee's review of Arizona and Pennsylvania A-133 audits were equally 
troubling, indicating these self-audits do not provide effective financial oversight of federal 
funds spent on fusion centers. 

D. DHS Grant Requirements Do Not Ensure States Spend 
Fusion Center Funds Effectively 

In administering its grant programs, DHS, through FEMA, outlines broad requirements 
for the types of activities that can be funded and equipment that can purchased. However, for 
several years DHS made no attempt at ensuring state expenditures on fusion centers addressed 
gaps in the centers' information-sharing capabilities. Recently, FEMA has made changes 
intended to make sure states and cities use FEMA grant dollars for fusion centers to improve 
these abilities, but those efforts still fall short of meaningful reform. 

Before 201 1, FEMA grant recipients faced few requirements on how they used grant 
funds for fusion center projects, beyond the general FEMA guidelines governing all 
preparedness grant projects. In 201 1, FEMA and I&A instituted new procedures intended to 

370 

better align FEMA grant funds with I&A priorities/ 

To begin with, I&A initiated what are intended to be annual assessments of each fusion 
center, measuring each facility's key capabilities, a list of attributes which includes having an 



February 201 1 "The State of California's Management of Urban Areas Security Initiative Grants Awarded 
During Fiscal Years 2006 through 2008," prepared by DHS IG, OIG-1 1-46, 
http://www.oig.dhs.gov/assets%5CMgmt%5COIG 11-46 Febll.pdf . 

369 "[TJhere is no plan to visit the other three urban areas that received Urban Areas Security Initiative grant funds . . 
. . The FY 2010 visits would not be timely for the FYs 2006 and 2007 grants since nearly all of these funds would 
have been spent and reimbursed by the State." "The State of California's Management of Urban Areas Security 
Initiative Grants Awarded During Fiscal Years 2006 through 2008," prepared by DHS IG, OIG-1 1-46, at 24, 
http://www.oig.dhs.gov/assets%5CMgmt%5COIG 11-46 Febll.pdf (2/20 1 1 ) 

370 Subcommittee interview of FEMA officials (6/14/2012). 



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approved privacy policy, information-sharing policies, governance plans, analyst training, and 
more. 371 



In addition, beginning in 201 1, FEMA required all states and cities to submit a project 
document known as an Investment Justification (IJ), in which they would describe how they 

372 

planned to spend FEMA funds on their fusion centers. FEMA asked recipients to use the IJ to 
show how they would use DHS grant money to address any weaknesses which had been noted 

373 

by DHS assessments. 

When FEMA received the Us from the states and cities, it shared them with officials at 
I&A. 374 I&A officials reviewed the Us for each fusion center against their assessment of that 
center, to ensure that the recipient planned to use its grant funds to address the capability gaps 
I&A assessors had identified at the center/ 



While this new procedure represents a significant improvement over past practice, the 
Subcommittee investigation identified three issues which weaken its effectiveness. 

First, the new system does not ensure that federal funds are spent on federal priorities. 
While I&A reviews the submitted proposals to ensure FEMA recipients say they will use their 
funds to address identified weaknesses at each fusion center, DHS does not require that a 
significant portion of the federal grant funds it awards for fusion centers be directed towards 
eliminating those weaknesses. In a hypothetical situation, a state could indicate it was spending 
$300,000 to address a particular weakness, and another $2 million to buy unrelated equipment 
such as emergency response vehicles or wiretapping devices, or even to defray overhead costs, 
without demonstrating steps to achieve the "must-have" capabilities required by DHS. 376 
Allowing fusion center expenditures for unrelated purposes significantly weakens FEMA's 
ability to ensure that federal funds for fusion centers are devoted to achieving federal priorities at 
those centers. 377 



Second, recipients of FEMA grant funds are under little obligation to follow through on 
commitments made in their Investment Justifications. FEMA gives preparedness grant recipients 
wide latitude to change their minds about spending priorities even after receiving grant funds. 
According to FEMA officials, recipients and their subgrantees are allowed to reprogram funds 
from one purpose to another without necessarily obtaining consent or notifying FEMA in 



371 For a complete list of attributes used in the DHS 201 1 assessment process, see Appendix B of this Subcommittee 
report. 

372 Subcommittee interview of Joel Cohen, I&A (7/12/2012). 

373 Subcommittee interview of FEMA (6/14/2012). 

374 Id. 

375 Subcommittee interviews of Joel Cohen, I&A (4/16/2012 and 7/12/2012). 

376 Emergency response and covert surveillance are not key capabilities for fusion centers, as demonstrated in 
Appendix A and B of this Subcommittee report. 

377 Subcommittee interview of Joel Cohen, I&A (7/12/2012). While Mr. Cohen stated, "I don't know what fusion 
center needs response vehicles," he confirmed that as long as some portion of the IJ addressed capability gaps, I&A 
and FEMA would allow the other expenditures as long as they were consistent with FEMA's general guidelines. 
"Okay, so be it," Mr. Cohen said. 



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advance. This latitude makes it possible for states and cities to report intentions to shore up 
key weakness at a fusion center, but after receiving the funds, spend them on other purposes. 

Third, no one at FEMA or I&A appears to be charged with ensuring that states and cities 
in fact, spend their fusion center funds on the commitments made in their Us. When the 
Subcommittee asked FEMA officials who was in charge of checking to see if states were 
actually using funds as promised to address their identified weaknesses, FEMA said that the task 
fell to I&A. When asked what role it played in overseeing states' and cities' spending federal 
dollars on fusion centers, I&A officials told the Subcommittee that they conducted no such 
oversight. "[I&A has] no role whatsoever in oversight," Joel Cohen, a senior I&A official, told 
Subcommittee. "It's true across the board .... We do not monitor [spending]. We do not 

380 

provide oversight, we do not provide monitoring." He indicated that was FEMA's 
responsibility, and added that FEMA coordinated its oversight efforts with I&A "all the time." 

381 



To test the effectiveness of DHS and FEMA oversight practices, the Subcommittee 
reviewed spending by FEMA recipients and subgrantees at five fusion centers. At each, the 
Subcommittee investigation found significant instances in which state and local agencies spent 
federal dollars meant to improve fusion center capabilities on items that did little to achieve 
those improvements or were not used by the centers at all. Although all of the cases occurred 
before FEMA and I&A had implemented the new 201 1 U review process for fusion centers, 
FEMA indicated all of the expenditures listed below appeared to be allowable under current 



(1) Using Fusion Center Funds on Chevrolet Tahoes 



In April 2008, the Arizona Department of Public Safety (AZDPS) bought a new 
Chevrolet Tahoe sport utility vehicle (SUV) using over $33,500 in DHS grant funds meant to 
enhance the capabilities of the Arizona Counter Terrorism Information Center (ACTIC), the 
state's fusion center. Specifically, the funds were intended to support Arizona's Terrorism 
Liaison Officers (TLO) Program, which is run by the ACTIC/ " TLOs are specially trained law 
enforcement officers whose role is to, among other things, "relay terrorism related information 

384 

and intelligence efficiently and appropriately between the ACTIC and field resources." 



3/8 Subcommittee interview of FEMA officials (7/19/2012). 

379 Subcommittee interview of FEMA officials (6/14/2012). Specifically, when asked if I&A's State and Local 
Program Office (SLPO) handled program monitoring of fusion centers, FEMA's Matthew Bower replied, "That's 
fair to say." 

380 Subcommittee interview of Joel Cohen (7/12/2012). 

381 Id. 

382 Subcommittee interviews of FEMA officials (6/14/2012 and 7/19/2012). 

383 Invoice, Midway Chevrolet-Isuzu, April 14, 2008, PSI-AZDOHS-03-0587 and 2007 State of Arizona 
Department of Homeland Security, 2007 State Homeland Security Grant Program Project Detail Workbook, Project 
Justification. PSI-AZDOHS-03-0008. The State of Arizona provided the Subcommittee with the vehicle invoice in 
response to a request for detailed documentation on its use of homeland security grant funds. 

384 2007 State of Arizona Department of Homeland Security, 2007 State Homeland Security Grant Program Project 
Detail Workbook, Project Justification. PSI-AZDOHS-03-0008. 



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For a law enforcement terrorism prevention grant FEMA awarded AZDPS in October 
2007, the state indicated the funds would be used to purchase equipment, including a vehicle, for 
TLOs outside of the Phoenix area to respond to chemical, biological, radiological, nuclear, and 
explosive (CBRNE) incidents. In accordance with the grant, a few months later, AZDPS 
provided the vehicle to the Flagstaff Fire Department for use by a city fire official designated as 
a TLO, under an agreement to "enhance domestic preparedness [CBRNE] response services 
concerning the activities of terrorism[.]" DHS does not consider responding to CBRNE 

387 

events, however, an essential fusion center capability. 

Moreover, according to Arizona records for the truck, the vehicle does not appear to 
qualify as a satisfactory CBRNE response vehicle: it is not equipped to respond to a zone 
affected by most types of CBRNE incidents, despite the award of an additional $9,400 in fusion 
center grant funds the state spent to install aftermarket equipment on the truck/ The state 
equipped the vehicle with lights, flashers, a siren and public address microphone, an anti-theft 
device, a notebook holder, computer mount, external cup holder, reinforced bumper, and a rear 

-jog 

compartment partition, among other items. 

The only specialized equipment related to CBRNE accompanying the vehicle was a 
radiation-detecting dosimeter. The device can identify exposure to radiation, but offers no 
protection against it. The city official to whom the vehicle was assigned told the Subcommittee 
he keeps the truck at his house and uses it primarily to commute between his home and the 
Flagstaff Fire Department. 390 

A year later, in October 2009, Arizona purchased and outfitted a second Chevrolet Tahoe 
SUV with DHS funds that were likewise intended to support ACTIC, again claiming it to be a 
CBRNE response vehicle. The state used about $47,000 in Urban Area Security Initiative 
(UASI) funds, and gave the truck to the Arizona State University Police Department 

391 

(ASUPD). The vehicle was assigned to a K-9 officer who was designated as a TLO. The 
vehicle was outfitted to serve as a police K-9 unit vehicle, with a kennel, heat alarm system, 
lights and sirens, radios, a patrol rifle, chemical protective gear, a gas mask, a GPS unit, a 

ago 

ballistic helmet and vest, and training equipment for the dog. 



2007 State of Arizona Department of Homeland Security, 2007 State Homeland Security Grant Program Project 
Detail Workbook, Project Justification. PSI-AZDOHS-03-0008. 

386 ACTIC, "Intergovernmental Agreement," October 2, 2008, PSI-Flagstaff_Fire_Dept-0 1-0002. 

387 For a list of fusion center capabilities used by DHS to assess fusion centers in 201 1, please see Appendix B of 
this Subcommittee report. 

388 1/30/2009 Invoice, Arizona Emergency Products, PSI-AZDOHS-03-0272. 

389 Id. 

390 Subcommittee Interview of Dep. Chief Jerry Bills, Flagstaff Fire Department (2/3/2012). Mr. Bills told the 
Subcommittee he used the vehicle for his daily commute since receiving it at some point prior to October 2008; he 
lived 12 miles from his station; and the odometer presently read approximately 27,000 miles. He estimated 15,000 
of those miles were from commuting. He did not indicate the truck had ever been used to respond to a CBRNE 
attack, although he said may have used it to attend and host training sessions in HAZMAT response, terror response 
and other topics. 

391 "Property Disposal Request and Authorization," March 10, 2010, State of Arizona Surplus Property; also, 
Midway Chevrolet Invoice, October 27, 2009 PSI-AZDOHS-03-0954. 

392 Subcommittee interview of Cpl. Parker Dunwoody, Arizona State University Police Department (2/2/2012). 



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The dog is trained and equipped only to detect conventional explosives, according to his 
handler. The officer told the Subcommittee that he was trained and equipped to respond to 
several kinds of CBRNE incidents/ While enhancing CBRNE response is a legitimate use of 
FEMA grant funds, CBRNE response is not a baseline capability DHS expects of state and local 
fusion centers. 

(2) Using Fusion Center Funds on Rent 

From 2009 to 201 1, Arizona used $1.98 million in FEMA grant funds to lease space for 
the ACTIC fusion center. 394 That amount covered the entire cost of ACTIC's lease from August 
2009 to August 201 1, which ran roughly $80,000 a month. 395 In interviews, FEMA stated that 
although its guidelines appear not to allow this use of DHS funds, it allowed the expenditures 
anyway. Such spending did little, if anything, to help the Arizona center address significant 
weaknesses in its ability to receive, analyze and share terrorism threat -related information with 
the federal government. 

Before using FEMA funds to make payments on ACTIC's lease, an Arizona official 
queried FEMA about the allowability of the expenditure. The official's response indicates 
FEMA's guidelines are not rigidly enforced. 

The Arizona official sent a February 2009 email to FEMA asking: "Can we reimburse 
rent for a fusion center?" A DHS official responded: "[Allowable (M&A [Management and 
Administration]) costs can pay for the leasing or renting of space for newly hired personnel. 
And since new people will be hired during the period of this grant © you should have no 
problem with it." 396 

The Arizona official replied, noting that the expenses in question were not "M&A" 
expenses which are normally confined to costs for administering FEMA grants within the state. 
FEMA restricts grant recipients from using any but a very small portion of their funding on 
management and administration expenses, which might include overhead costs such as lease 
payments, office equipment, and administrative salaries. "This would be under Organizational 
not M&A," the Arizona official wrote. "M&A is only allowable to 3% [of the grant] and these 
funds are used to support the direct administration of all grants (funds the AZDOHS office)." 



" Email from Cpl. Parker Dunwoody to the Subcommittee (10/1/2012). 

394 Award letters from Arizona Dept. of Homeland Security (AZDHS) to Arizona Dept. of Public Safety (AZDPS), 
September 19, 2009, September 18, 2009 and August 6, 2010, PSI-ACTIC-02-0952, PSI-ACTIC-02-0967, PSI- 
ACTIC-02-0982. 

395 AZDPS lease agreement for ACTIC, July 7, 2009, PSI-AZDOHS-05-0005. 

396 Emails between David W. Nichols, DHS, and Lisa Hansen, AZDHS, February 5-6, 2009, PSI-AZDOHS-03- 
1312. [Emphasis and emoticon in original.] 

397 For example, "Fiscal Year 2008 Homeland Security Grant Program Guidance and Application Kit," FEMA 
(2/2008), at 23, B-3; "Fiscal Year 2009 Homeland Security Grant Program Guidance and Application Kit," FEMA 
(1 1/2008), at 34, 65; "Fiscal Year 2010 Homeland Security Grant Program Guidance and Application Kit," FEMA 
(12/2009), at 35, 72. 

398 Emails between David W. Nichols, DHS, and Lisa Hansen, AZDHS (2/5/2009 - 2/6/2009), PSI- AZDOHS -03- 
1312. 



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"Organizational, yes," the DHS official responded. 

Still apparently unsure, the Arizona official wrote again. "Thank you for your response, 
if I understand you correctly. AZDOHS [may] fund the fusion center rent with HSGP FY09 
funds in the category of Organizational and not impact M&A funds?" 400 

"yes," the DHS official responded. 401 

FEMA grant guidance for the period indicates that rent or lease payments are allowed as 
organizational expenses, if it is "for leasing or renting of space for newly hired personnel during 
the period of performance of the grant program." 402 As such, rent or lease payments for space 
not intended for new personnel would not be allowed. However, that is how Arizona applied the 
funds: to pay for not only some percentage of ACTIC's lease to house new employees, but to 
cover ACTIC's entire lease, a cost of nearly $1 million a year. 

Appearing to contradict their own guidelines, FEMA officials interviewed by the 
Subcommittee stated that they have approved using grant funds to cover fusion center lease 
payments several times. "There was a policy decision within our office, I know anecdotally 
we've allowed it many times in the past," FEMA's Matthew Bower told the Subcommittee. 403 
FEMA provided the Subcommittee with a list of states it had allowed to use grant funds this way, 
but was unable to provide any documentation memorializing the policy decision to allow grant 
funds to reimburse lease costs, or informing other grant recipients of the change. 404 

When asked how and why FEMA allows federal grant funds to cover such a basic cost as 
rent for a fusion center, Elizabeth Harman, FEMA's grants chief, said she was "not well- versed 
on the rent issue." Ms. Harman noted that FEMA has "given [recipients] a lot of flexibility in 
how these grant dollars are spent." 405 Allowing fusion centers to use DHS funds to cover rental 
expenses, which are often substantial, necessarily reduces the funds available to develop baseline 
counterterrorism capabilities. 



399 Id. 



41,2 "Fiscal Year 2009 Homeland Security Grant Program Guidance and Application Kit," FEMA (1 1/2008), at 63. 

403 Subcommittee interview of FEMA officials (7/19/2012). 

404 DHS Response to the Subcommittee (8/1/2012), DHS-HSGAC-FC-059232. The states who have been allowed 
to use grant funds to cover lease costs for fusion centers include California, Arizona, Delaware, Georgia, 
Massachusetts, Minnesota, Mississippi and Wisconsin; FEMA states it has also allowed fusion center rent costs for 
Puerto Rico and the city of Jacksonville. 

405 Subcommittee interview of Elizabeth Harman (8/2/2012). 



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(3) Using Fusion Center Funds on Wiretap Room 



In 2009, AZDOHS awarded the state's Department of Public Safety $105,112 under a 
DHS grant program for urban areas 406 to support IT infrastructure at ACTIC. 407 Officials from 
the fusion center told the Subcommittee and related documents indicate that roughly $64,000 of 
that total was used to purchase equipment for a surveillance monitoring room at the ACTIC 
fusion center. 408 



The money purchased software, a new laptop, two monitors and two 42" flat screen 
televisions. 409 Some of the funds were also used to send an employee to receive training related 
to surveillance technology, according to an Arizona official. 410 The monitoring room, which 
ACTIC officials referred to as "the wire room," is used for criminal investigations. 411 

As a state-run fusion center, it is the state of Arizona's prerogative to house criminal 
investigative resources within the fusion center. However, federal guidelines for fusion center 

412 

key capabilities do not include covert or surreptitious intelligence gathering. Indeed, fusion 
center capabilities used in DHS assessments relate to the ability to receive, analyze, and share 
information, not gather it. Nevertheless, FEMA approved the expenditures for ACTIC. 

In all three of these cases, the state of Arizona acted in accordance with FEMA rules and 
guidelines. The use of DHS grant funds to purchase CBRNE response vehicles, surveillance 
equipment, and to cover rent costs are allowable under the grant program. 

But DHS does not consider CBRNE response to be a baseline capability for fusion 
centers. Likewise, DHS does not consider surveillance to be a fusion center capability. Rental 
costs also do not address the counterterrorism baseline capabilities every fusion center is 
supposed to possess. The questioned purchases do not directly boost the center's needed 
capabilities; and no DHS rule or guideline currently encourages Arizona to focus its spending on 
those counterterrorism information-sharing priorities. 

At the time these expenditures were made, ACTIC had a catalog of weaknesses inhibiting 
its participation in sharing terrorism threat information with the federal government. A 2010 
assessment of the center on behalf of DHS concluded the center had no system for gathering, 
processing, collating and storing information; it had no analytic production plan; it had no 
training plan for analysts "that adheres to nationally-recommended standards;" it had no staffing 
plan or continuity of operations plan; and at the time, it had no privacy policy nor a way to be 
sure all personnel received privacy training. 413 In the most recent federal assessment of ACTIC 



406 The program is known as the Urban Area Security Initiative (UASI). 

407 2009 Homeland Security Grant Program Award, Grant Agreement Number 555601-05. PSI-ACTIC-02-0907. 

408 Wire room list of expenditures, PSI-AZDOHS-08-0047. 

409 Id. 

410 Email from Maj. Mike Orose, ACTIC, to Subcommittee (2/9/2012), PSI-AZDOHS-08-0001. 

411 Id. 

412 For the list of Baseline Capabilities for Fusion Centers (2008) and the Critical Operational Capabilities (2008) 
see Appendix A of this Subcommittee report. 

413 "Arizona Counter Terrorism Information Center Baseline Capabilities Assessment," PM-ISE (10/2010), DHS- 
HSGAC-FC-007497. 



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in 201 1, DHS found the center still lacked 14 out of 50 attributes needed to achieve minimal 
functionality as a fusion center contributing to federal counterterrorism efforts. 414 

(4) Using Fusion Centers Funds on Computers for County 
Medical Examiner 

Another example of questionable fusion center spending involved the procurement of 
specialized computers. In Cleveland, Ohio, officials used $15,848 in 2007 FEMA grant funds 
for the Northeast Ohio Regional Fusion Center (NEORFC) to buy ruggedized Toughbook laptop 
computers. 415 In response to a Subcommittee inquiry, County officials reported the laptops were 
not located at the fusion center, but at the county medical examiner's office. 416 

When asked why laptops intended for the fusion center were located at the medical 
examiner's office, a Cuyahoga County official responded the that laptops were for processing 
human remains in the aftermath of a mass casualty event in the Cleveland area. The official 
stated his region had not experienced such an event. 417 

When asked how the purchase of the computers would benefit the fusion center and could 
be portrayed as a fusion center expenditure, the official said he assumed that in the aftermath of a 
mass casualty event, information about the human remains would have "intelligence value." He 
said he did not know whether the laptops were able to connect and securely transmit information 
to the fusion center. 

In 2010, a capabilities assessment of NEORFC conducted on behalf of DHS concluded 
the center was all but completely incapable of functioning as a fusion center. "The center is 
lacking in its ability to process, collate, or disseminate information .... Based on [its] self- 
assessment, the Northeast Ohio Regional Fusion Center (NEORFC) appears to be struggling. 
[T]he center exhibits limited capability to support the intelligence cycle .... Limited personnel, 
few documented processes or plans . . . hinder the ability to achieve baseline capabilities .... 

418 

[T]here is limited capability to process or disseminate information collected." 

When asked about the computer purchase, FEMA's Matthew Bower said, "[T]his would 
jump out to me as well. I can't give you a full answer." Mr. Bower noted that FEMA does not 
review purchases at the subgrantee level, rather relying on the state administrative agencies' to 
do so, so the agency was likely unaware of the purchase. 419 



DHS, "201 1 Fusion Center Assessment Individual Report, Arizona Counter Terrorism Information Center," 
Revised March 2012, DHS-HSGAC-FC-047650. 

415 "HSGP Equipment Inventory," NEORFC (7/12/2011). 

416 Id. 

417 Subcommittee interview of Hugh Shannon, Administrator, Cuyahoga County Medical Examiner's Office 
(12/15/2011). 

418 Northeast Ohio Regional Fusion Center Baseline Capabilities Assessment (October 2010), DHS-HSGAC-FC- 
010416, at 8, 10. 

419 Subcommittee interview of FEMA (7/19/2012). 



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(5) Using Fusion Center Funds for Surveillance Equipment, 
Computers, Televisions 

In 201 1, the San Diego area's fusion center, known as the Law Enforcement 
Coordination Center (SD-LECC), spent $25,000 on high-tech surveillance equipment, most of 
which was so sophisticated it eventually returned it for simpler devices. 420 This purchase was 
made, despite the fact that federal guidelines for fusion center key capabilities do not include 

42 1 

covert or surreptitious intelligence gathering. 

SD-LECC used FEMA grant funds to make the following purchases: 

• a covert, wireless audio/video recorder with a "shirt-button camera"; 

• an ultra-low-light "pinhole" VGA camera; and 

422 

• an ultra-low-light shirt-button camera "with interchangeable tops." 

In a document provided to the Subcommittee, SD-LECC officials stated that the center returned 
some of the equipment after it was deemed "simply too complicated for our customers to use." 423 
In their place, the fusion center received other undercover surveillance devices, including a 
camera hidden in a hat and one disguised as a water bottle. 424 It is unclear how the San Diego 
fusion center's use of federal grant funds to buy surveillance equipment assisted the primary 
mission of DHS's fusion center effort. Nevertheless, the purchases were allowable under FEMA 
guidelines. 

When asked if the surveillance equipment purchases, such as a shirt-button camera, 
raised concerns for him, Mr. Bower, head of FEMA's Risk Analytics and Strategic Initiatives 

425 

Branch, told the Subcommittee he would "need to know the exact use of that equipment." Mr. 
Bower noted that FEMA officials "don't review every piece of equipment that's purchased," but 
that was actually a strength of the agency's approach. "It's on purpose," Mr. Bower explained. 
"Asking for every single widget . . . isn't furthering the success of these grantees." 426 

The San Diego fusion center also spent nearly $200,000 on 1 16 computers, monitors, and 

427 

related equipment. ~ Asked how 80 full-time employees used over 100 computers, SD-LECC 
officials told Subcommittee investigators that not all of the computers were for fusion center 



42U Correspondence from Lee Yoder, SD-LECC Director, to Subcommittee (12/14/201 1), at 4, PSI-SDLECC-03- 
0001; Invoice from ADS to Sherriff s Department of San Diego (4/15/201 1), PSI-SDLECC-03-0009. 
21 For a list of baseline capabilities for fusion centers, see Appendix A of this Subcommittee report. 

422 Correspondence from Lee Yoder, SD-LECC Director, to Subcommittee (12/14/201 1), at 4, PSI-SDLECC-03- 
0001; Invoice from ADS to Sherriff's Department of San Diego (4/15/201 1), PSI-SDLECC-03-0009. 

423 Memorandum from SD-LECC Director Lee Yoder to Subcommittee (12/14/201 1). 

424 Memorandum from ADS to HIDTA, Leo Marchand (10/21/201 1), PSI-SDLECC-03-0010; Correspondence from 
Lee Yoder, SD-LECC Director, to Subcommittee (12/14/201 1), PSI-SDLECC-03-0001. 

425 Subcommittee interview of FEMA (7/19/2012). 

426 Id. 

427 Dell invoice XCN5467W2M, May 21, 2008, PSI-CalEMA-02-0485; Dell invoice XCNF2T747, May 30, 2008, 
PSI-CalEMA-02-041 1; Dell invoice XCW1P97K1, September 9, 2008, PSI-CalEMA-02-0513; Dell invoice 
XCW418R32, September 11, 2008, PSI-CalEMA-02-0510; Dell invoice XDRFM3XK7, April 23, 2010, PSI- 
CalEMA-02-2234; Dell invoice XDRFN8T48, April 23, 2010, PSI-CalEMA-02-223 1 . 



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personnel; some were used by other law enforcement personnel to access the same network. The 

49 8 

officials explained that some of the computers were not even located in the fusion center. To 
justify the purchases, officials told Subcommittee staff that the computers could be used to share 
"case data" and "statistical data" with the fusion center. 429 



The San Diego center also spent nearly $75,000 on 55 flat-screen televisions. However, 
the intelligence training program they were meant to facilitate was never purchased. 430 When 
asked what the televisions were being used for, officials said they displayed calendars, and were 
used for "open-source monitoring." Asked to define "open-source monitoring," SD-LECC 
officials said they meant "watching the news." 431 

Officials responsible for the fusion center told the Subcommittee they now view the 
televisions as "a huge mistake," and stated the former fusion center director who authorized the 

4^7 

purchase was "relieved of his duties." 

An October 2010 "baseline capabilities assessment" on behalf of DHS found a number of 
weaknesses at SD-LECC, ranking them below the national average in 9 of 12 capabilities. 433 
Among other weaknesses, assessors noted the absence of memoranda of understanding and/or 
non-disclosure agreements with agencies who participate in the center; the absence of "a 
procedure manual that outlines privacy, physical security, and information security policies;" the 
absence of a list of "data sources and repositories necessary to conduct analysis;" and the 
absence of "a mechanism to receive stakeholder feedback." 434 



(6) Using Fusion Center Funds for Shifting Information 
Technology Needs 

In some cases, state or regional grant recipients may substantially revise their stated 
intentions to spend funds requested on behalf of fusion centers. Consider, for example, the 
shifting descriptions and justifications associated with one project managed by the Washington, 
D.C. Homeland Security and Emergency Management Agency (HSEMA), which oversees the 
city's fusion center. 



Early in 2008, the D.C. Metropolitan Police Department submitted an initial proposal to 
HSEMA requesting $725,000 for a project entitled, "Information Technology (Data Mining, 
Analytical Software)." The proposal provided no indication that the project was associated with 
a fusion center, nor did it identify any specific items that were to be purchased. 435 



428 Subcommittee interview of SD-LECC officials (1 1/30/201 1). 

429 Id. 

430 Id. 

431 Id. 

432 Id. 

433 10/2010 "San Diego Law Enforcement Coordination Center - Baseline Capabilities Assessment," PM-ISE, DHS- 
HSGAC-FC-007893. 

434 Id. at 9-12. 

435 1FASH8 Project Concept MPD-Data Mining, Analytical Software, 1, 4 and 5. 



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Subsequently, HSEMA included this project in a broader application to FEMA for grant 
funding in 2008. In its application materials, HSEMA told FEMA it wanted to use $2.7 million 
Homeland Security grant funds on an effort that would enhance the capabilities of the police 
department as well as "the information and intelligence gathering and analysis capabilities of the 
D.C. Intelligence Fusion Center." 436 Specifically, the effort was to include an upgraded 
electronic records management system, data mining software, and an Automated License Plate 
Recognition system (LPR system). The city's description of how the data mining software was 
to be used noted that "installing improved analytical and data mining tools and training analysts 
to use them effectively will improve the quality of final intelligence products" and "will bolster 
the DC Intelligence Fusion Center analysts' ability to identify trends, track patterns, and generate 

4^7 J J 

quality analytical products." 

After receiving its allocation of grant funding from FEMA, D.C. HSEMA awarded a 
subgrant to the D.C. Metropolitan Police Department (MPD) in October 2008, worth $700,000 
for the project, referred to in the grant document as "Analytical & Data Mining Software - 

438 

Fusion Center." In addition, the project as described in the award agreement documentation 
had changed. It included a records management system upgrade at a cost of $100,000, and 
"analytical software" at a cost of $90,000. The LPR system was dropped, though it may have 
been included in another DHS subgrant. The project also added for the first time sophisticated 
cell phone tracking devices, and "handheld citation issuance units and accessories." Those new 
items seem to be outside the scope of DHS-recognized key capabilities for a fusion center, yet 
their cost, $510,000, became the largest portion of the project. 439 Also of significance is that 
none of the $700,000 in funds was designated for the D.C. fusion center; instead, the sole named 
recipient was now the D.C. police department. 

The grant award changes did not end there. In July 2010, the police department again 
altered the description, nearly two years after the subgrant was awarded. It updated the project 
plan to indicate that the records management system would now cost $376,070; the cell phone 
tracking tools and service would cost $266,000; and the remaining funds would now be used to 
purchase Closed Circuit television (CCTV) download kits for $12,250, and Liquid Crystal 
Display (LCD) "Status Boards" for $45,680. 440 

By the time the grant funds were actually spent in 2010, purchase orders and invoices 
reviewed by the Subcommittee indicate further changes to the cost of some items, and to what 
was purchased. It bought the records management system for $409,818, and the cell phone 
tracking and surveillance system for $260,935. Rather than purchase the CCTV download kits 
or LCD status boards, the police department spent $1 1,958 to purchase two Panasonic laptops; 
$5,552 to purchase six Dell computer towers; and $1 1,735 to pay fees to cellular providers. 441 
Again, none of the equipment was destined for the D.C. fusion center. 



36 FY 2008 DC HSGP Investment 1 Law Enforcement and Information Sharing, 1 and 4. At the time of its 
application, HSEMA did not know the total amount of funding FEMA would award. 

437 Id. at 2, 3. 

438 1FASH8 (8SHSP127-01) Award Letter Signed, 1. 

439 Id. at 8. 

440 1FASH8 Project Plan revised 07152010, 1 and 6. 

441 1FASH8 Expenditures; PSI-DCHSEMA-02-0001. 



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HSEMA officials told the Subcommittee on multiple occasions that the funding 
associated with this subgrant was not used to support the D.C. fusion center, despite the original 
written justification HSEMA provided to FEMA to support the grant. 442 When asked about this 
series of events, Mr. Bower of FEMA noted that, as long as the equipment ultimately purchased 
using DHS grant funds is considered allowable under the grant guidelines, then states are 
allowed to purchase equipment that may differ from what is indicated in their initial Investment 
Justifications and may allocate it to an entity other than the one originally identified. 
Furthermore, states can exercise discretion in determining whether a proposed change merits 
requesting new approval from FEMA. 443 

When DHS and FEMA grant procedures allow grant recipients to change the identified 
subgrantee, the items to be purchased, the amounts to be spent, and the ultimate use of the 
purchased equipment, it is clearer why DHS and FEMA are unable to accurately track the 
taxpayer dollars actually awarded to or used by fusion centers. The loose rules render effective 
financial oversight of fusion center difficult, if not impossible. 



Emails from HSEMA officials to the Subcommittee (6/4/2012). 
Subcommittee interview of FEMA (7/19/2012). 



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VI. FUSION CENTERS HAVE BEEN UNABLE TO MEANINGFULLY 
CONTRIBUTE TO FEDERAL COUNTERTERRORISM EFFORTS 



• Two federal assessments found fusion centers lack basic counterterrorism capabilities. 

• Despite promises, DHS has not assessed fusion center performance. 

• Some DHS -recognized fusion centers do not exist. 

• Many fusion centers do not prioritize counterterrorism efforts. 

• DHS "Success Stories" do not demonstrate centers' value to counterterrorism efforts. 

• Fusion centers may have hindered, not aided, some federal counterterrorism efforts. 



A. Overview 

The Department of Homeland Security has directed hundreds of millions of dollars to 
support and strengthen the capabilities of state and local fusion centers. DHS officials have 
spoken publicly about the centers' key role in assisting federal officials' fight against terrorism. 
Yet the centers themselves have fallen short of developing the capabilities necessary to 
meaningfully contribute to the federal counterterrorism mission. 

"We have established programs that facilitate a strong, two-way flow of threat-related 
information, where SLTT [State, Local, Tribal and Territorial] officials communicate possible 
threat information to federal officials, and vice-versa," DHS Secretary Janet Napolitano said in 
testimony before the Senate Homeland Security and Governmental Affairs Committee in 
September 2010. 444 "[P] re-operational activity - such as target selection, reconnaissance, and dry 
runs - occur over a very short time period, or in open and crowded places. Informing federal 
authorities . . . increase[es] the likelihood that an attack can be thwarted .... The nation's fusion 
centers have been a hub of these efforts, combined with other initiatives DHS has instituted to 
better partner with SLTT law enforcement." 445 

DHS has struggled to identify a clear example in which a fusion center provided 
intelligence which helped disrupt a terrorist plot, even as local and federal law enforcement have 
thwarted dozens of terrorist attacks on U.S. soil and against U.S. interests in the past decade. 446 
In some cases, fusion centers' analytical efforts have instead caused frustration and 
embarrassment for themselves and DHS. 

In four success stories that DHS identified, the Subcommittee investigation was unable to 
confirm that the fusion centers' contributions were as significant as DHS portrayed them; were 
unique to the intelligence and analytical work expected of fusion centers; or would not have 
occurred absent a fusion center. 



Testimony of DHS Secretary Janet Napolitano before the Senate Homeland Security and Governmental Affairs 
Committee, "Nine Years After 9/11: Confronting the Terrorist Threat to the Homeland" (9/22/2010). 

445 Id. 

446 '"rjjg Congressional Research Service (CRS) estimates that there have been 53 homegrown violent jihadist plots 
or attacks in the United States since September 11, 2001 (9/11)." 11/15/2011 "American Jihadist Terrorism: 
Combating a Complex Threat," Jerome P. Bjelopera, Congressional Research Service. 



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In addition, two recent national assessments conducted by and for DHS found fusion 
centers often lacked one or more basic capabilities necessary to do the work expected of them, to 
share information which could help detect and disrupt terrorist plots against the United States. 
These assessments, conducted in 2010 and 2011, found weaknesses at most fusion centers they 
examined, from having insufficiently trained intelligence personnel, to having inadequate 
physical security, to an inability to distribute alert and warning information to state and local 
agencies, and an inability to effectively share appropriate information with the federal 

i i 447 

government or local partners. 

Each fusion center is different, and neither assessment indicated a sole reason the centers 
had not yet developed the necessary capabilities to contribute to the federal counterterrorism 
mission. However, neither assessment found a center which had developed all of the basic 
necessary capabilities to participate in federal counterterrorism intelligence efforts. 448 

As noted earlier, some fusion centers have gone years without a physical presence and 
without filing any intelligence reports. Others have operated for years without having DHS 
personnel on site to report counterterrorism information, effectively cutting the centers off from 
the larger DHS terrorism-related intelligence efforts. 449 Still other fusion centers have had DHS 
personnel on site, but have produced information of little value for federal counterterrorism 
intelligence efforts. 450 As well, many of the fusion centers have not made counterterrorism an 
explicit priority, and some have de-emphasized counterterrorism in favor of more traditional 
public safety and anti-crime work. 

Despite these challenges, senior DHS officials have continued to claim that state and 
local fusion centers have made significant contributions to its counterterrorism efforts, and cited 
specific "success stories" which they claim demonstrate the centers' value. The Subcommittee 
examined four such cases in which DHS claimed fusion centers made important or "key" 
contributions to investigations of significant terrorist plots on U.S. soil. The Subcommittee 



44/ See "2010 Baseline Capabilities Assessment," PM-ISE, DHS-HSGAC-FC-007231; "201 1 National Network of 
Fusion Centers, Final Report, May 2012," DHS-HSGAC-FC-057027. 

448 Id. 

449 The need for DHS to gather locally-generated terrorism-related information from fusion centers is an open 
question. The FBI is the nation's lead federal agency to investigate terrorism cases in the United States, and DHS 
expects fusion centers to share actual threat-related information immediately with the FBI-led Joint Terrorism Task 
Forces (JTTFs). ("Domestic Terrorism in the Post-9/1 1 Era," FBI.gov, 

http://www.fbi.gov/news/stories/2009/september/domterror 090709/ , "Fusion Centers and Joint Terrorism Task 
Forces," DHS.gov, http://www.dhs.gov/files/programs/gc 129891 1926746. shtm ). The Department of Justice also 
leads the National SAR (Suspicious Activity Reporting) Initiative (NSI), which allows personnel at participating 
fusion centers to relay information about suspicious, potentially terror-linked activity that lacks a clear nexus to 
terrorism. ("Nationwide SAR Initiative," NCIRC.gov, http://nsi.ncirc.gov/default.aspx ). Thus, it is not clear what 
role exists for DHS to receive terrorism-related information from fusion centers, that is not already being received or 
coordinated by officials from the Department of Justice. When the Subcommittee asked Undersecretary Wagner 
what counterterrorism information DHS intelligence reporting at fusion centers shared which was not already being 
shared via NSI or the JTTFs, Ms. Wagner first suggested reporting on fraudulent documents which had a nexus to a 
suspected terrorist. Upon consideration, Ms. Wagner said a fusion center would probably share that information with 
the area JTTF. "There are numerous reasons why IIRs are important," Ms. Wagner then said. "I wish I could come 
up with a better example." Subcommittee interview of Caryn Wagner (9/16/2012). 

450 Memorandum from Jim Chaparro to Bart Johnson, "Homeland Intelligence Reports" (1/7/2010), at 2, DHS- 
HSGAC-FC-050743; Email from Chaparro to Johnson, "HIR Backlog" (1/4/2010), DHS-HSGAC-FC-056637. 



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investigation found that the claims made by DHS did not always fit the facts, and in no case did a 
fusion center make a clear and unique intelligence contribution that helped apprehend a terrorist 
or disrupt a plot. Worse, three other incidents examined by the Subcommittee investigation 
raised significant concerns about the utility of the fusion centers, and raised the possibility that 
some centers have actually hindered or sidetracked federal counterterrorism efforts. 

Federal officials have been well aware of these episodes, and the underlying weaknesses 
in fusion centers' capabilities that likely contributed to them. But they have chosen not to 
highlight the considerable shortcomings of fusion centers in public appearances or in briefings to 
Congress. Instead they have chosen to portray fusion centers as "linchpins" of the federal 
government's fight to prevent terrorism, making "vital" contributions to the federal 
government's efforts to keep the country safe from another terrorist attack. This portrayal is 
simply at odds with the actual counterterrorism records of the fusion centers. 

B. Two Federal Assessments Found Fusion Centers Lack Basic 
Counterterrorism Capabilities 

Two comprehensive assessments of fusion centers by or at the request of DHS, 
completed in 2010 and 2011, found widespread deficiencies in fusion centers' basic capabilities 
to properly collect, analyze, and share intelligence on homeland security threats. 451 

(1) 2010 Assessment 

In 2010, seven years after DHS had begun funding state and local fusion centers, the 
Department's Office of Intelligence and Analysis (I&A) asked the Program Manager for the 
Information Sharing Environment (PM-ISE), a part of the Office of the Director of National 
Intelligence (ODNI), to lead an interagency team in conducting a nationwide assessment of state 
and local fusion centers. 452 

The assessment was carried out in two parts. First, PM-ISE asked fusion centers to 
complete a rigorous, 380-question self-assessment questionnaire. The questions were based on a 
set of eight "baseline capabilities" which had been identified by DHS, the Department of Justice, 
and a panel of fusion center experts. These eight baseline capabilities represented the "necessary 
capabilities required to support federal counterterrorism mission requirements." 453 

Second, teams of federal intelligence experts fanned out across the nation to visit fusion 
centers and validate whether each possessed the capabilities their officials claimed in their self- 
assessment responses. PM-ISE reported that although DHS publicly claimed to recognize 72 
operational fusion centers at the time of the assessment, three were "not functional at a level to 

451 "2010 Fusion Center Baseline Capabilities Assessment," PM-ISE, (10/2010) DHS-HSGAC-FC-007231; "2011 
National Network of Fusion Centers, Final Report, May 2012," DHS-HSGAC-FC -057027. 

452 "2010 Fusion Center Baseline Capabilities Assessment," PM-ISE, (10/2010) at 5, DHS-HSGAC-FC-007241. 

453 Id. at 4, DHS-HSGAC-FC-007231. In 2008, the Departments of Justice and Homeland Security devised a list of 
12 "baseline capabilities" for fusion centers; in 2010, fusion center directors "distilled" that list to eight "National 
Network priorities." ("Baseline Capabilities for State and Major Urban Area Fusion Centers," September 2008, 
http://www.it.oip.gov/documents/baselinecapabilitiesa.pdf ; "National Network of Fusion Centers Fact Sheet," 
DHS.gov, http://www.dhs.gov/national-network-fusion-centers-fact-sheet) . 



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receive a visit," and one "was not operational" at all. On-site visits were, thus, made to 68 
fusion centers. 

The "baseline capabilities" the assessors examined were precisely that: basic, minimum 
standards of functionality necessary to effective intelligence sharing. As the officials who 
identified the capabilities in 2008 wrote, "By achieving this baseline level of capability, a fusion 
center will have the necessary structures, processes, and tools in place to support the gathering, 
processing, analysis, and dissemination of terrorism, homeland security, and law enforcement 
information." 455 

The final 2010 assessment report was about 140 pages long. Supporting documents 
included an individual assessment of each of the 68 fusion centers then in operation. The final 
report found that a third of fusion centers had no defined procedures for sharing information 
gathered outside of their walls, one of the prime reasons for their existence. It found that more 
than half of all fusion centers lacked procedures for receiving and sharing with partner agencies 
information on threats received from DHS and other federal agencies. And "most" fusion 
centers told the assessors that their intelligence and analytical responsibilities were designed to 
assist with response and recovery efforts after a major event or attack, 456 not to prevent one, 
inverting the notion of what many perceive to be the primary purpose of the fusion centers. 

The 2010 assessment concluded that most fusion centers not only lacked the minimum 
capabilities to function effectively, they also lacked plans showing how they would develop 
those capabilities. It also concluded that two-thirds of fusion centers had no way to assess the 
return on investment taxpayers received for funding their operations. 457 

Finally, the 2010 assessment criticized the federal government for failing to have 
adequately "defined and articulated" the capabilities it expected of the fusion centers in order to 
support federal missions, and for lacking a budget that detailed how it planned to fund fusion 
center efforts to "develop, deploy, and sustain these capabilities." 

DHS did not make any of these findings public or share them with Congress. Moreover, 
when the Subcommittee requested access to the findings of the 2010 assessment, DHS initially 
denied such a report existed. Then, after the assessment report was identified internally, DHS 
resisted turning it over to the Subcommittee. Some DHS officials contended that, although the 
Subcommittee had requested all fusion center analyses "produced within DHS," technically the 



434 "2010 Fusion Center Baseline Capabilities Assessment," PM-ISE, (10/2010) at 5, 8, DHS-HSGAC-FC-007231. 

455 September 2008, "Baseline Capabilities for State and Major Urban Area Fusion Centers," http:// 
www.it.oip.gov/documents/baselinecapabilitiesa.pdf . 

456 "2010 Fusion Center Baseline Capabilities Assessment," PM-ISE, (10/2010) at 17, 18, 24, DHS-HSGAC-FC- 
007231. 

457 "2010 Fusion Center Baseline Capabilities Assessment," PM-ISE, (10/2010) at 18, 24, 37, DHS-HSGAC-FC- 
007231 at 37. 

458 "2010 Fusion Center Baseline Capabilities Assessment," PM-ISE, (10/2010) at 3, DHS-HSGAC-FC-007231. 



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assessment had been conducted at the request of DHS by another federal office, and therefore 
had not been literally "produced within DHS." 459 

In June 201 1, during the course of an interview, a senior DHS intelligence official 
presented a copy of the national 2010 assessment to the Subcommittee, unaware that the 
Department had maintained to the Subcommittee no such document could be located. 460 DHS 
officials at the interview declined to leave that copy of the report with the Subcommittee, saying 
they needed time to resolve their concerns about agreements of confidentiality allegedly made 
with fusion centers. Those agreements, the officials stated, prohibited the Department from 
sharing the report with Congress. 461 



When the Subcommittee requested copies of those agreements, DHS responded that they 
al "assurances." 462 When the 
they were made by PM-ISE officials. 



were oral "assurances." 462 When the Subcommittee asked who made the agreements, DHS said 



PM-ISE officials interviewed by the Subcommittee said they did not recall any such 
agreements. Upon review of its records, PM-ISE determined that it may have made certain 
assurances in 2009 during a pilot study that preceded the baseline assessment. "[I]t appears that, 
in conducting the pilot study in 2009, PM-ISE made this point and stated that information would 
be treated as sensitive and not further disseminated without further consultation," PM-ISE stated. 
"It is not clear if similar assurances were given in 2010, but this appears likely as the same 
considerations . . . were present, and as a result, confidentiality was important to achieving the 
goals of the assessment." 463 

DHS eventually produced the "report cards" on individual fusion centers and the final 
2010 assessment report to the Subcommittee after obtaining "consent" from a private, non- 
governmental organization, the National Fusion Center Association (NFCA), which supposedly 
had the authority to represent the 68 fusion centers subject to review. In a letter to the 
Subcommittee, NFCA explained it had "authorized" DHS to share the assessment information 
with Congress. 464 

NFCA, a private organization led by a former senior DHS grants official, advocates for 
increased federal funding for state and local fusion centers. 465 It is funded by corporations who 
seek to do business with fusion centers. 466 It is not a membership organization, but the group 



459 8/24/2011 "Explanation of Why DHS Did Not Produce the Baseline Capabilities Assessment to Subcommittee 
Prior to June 24, 201 1," prepared by DHS, PSI-DHS-6 1-0002. 

460 Subcommittee interview of Bart Johnson (6/24/201 1). 

461 Id. 

462 Written response from DHS, DHS-HSGAC-FC-059296 (8/1/2012). 

463 Subcommittee interview of PM-ISE officials (9/14/2012); PM-ISE response to Subcommittee inquiry 
(9/27/2012). 

464 NFCA letter to the Subcommittee (7/1/2011), PSI-NFCA-0 1-0001. 

465 "About NFCA," http://www.nfcausa.org/ ; Statement of W. Ross Ashley III, Executive Director, NFCA, before 
the Subcommittee on Homeland Security, Committee on Appropriations, U.S. House of Representatives, 
http://appropriations.house.gov/uploadedfiles/hhrg-l 12-apl5-rashley-20120307.pdf ; Subcommittee interview of Ben 
Bawden, W. Ross Ashley III (8/21/2012). 

466 Subcommittee interview of Ben Bawden and W. Ross Ashley III (8/21/2012). According to Mr. Ashley, the 
group receives funds from Microsoft, ESRI, Thomson-Reuters and Mutualink, among other firms. "When you look 



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purports to represent all DHS -recognized fusion centers, and invites them to help elect its board 
of directors. 4 7 

In an interview with the Subcommittee, the group's director, W. Ross Ashley III, said he 
no longer stood by the language in his letter. "Maybe the term 'authorized release' wasn't 
appropriate," he said, calling his phrasing "a little boisterous on our part." 468 

(2) 2011 Assessment 

In 201 1, DHS did not request PM-ISE to repeat its fusion center baseline capability 
assessment. Instead, DHS itself assumed responsibility for conducting a nationwide fusion 
center assessment. Deeming the 2010 assessment "too exhaustive" and "almost irrelevant," DHS 
narrowed the assessment criteria to checking for 55 "attributes" which it believed composed the 
eight previously-defined capabilities, down from the 380 items examined in the 2010 
assessment. 469 

Like the 2010 assessment, DHS asked fusion center directors to complete an online self- 
assessment, as well as provide data on staff, budget and operational costs. 470 

After that information was submitted, "validation teams" of personnel from DHS and 
other federal agencies reviewed the self-assessment data to "identify submission errors and 
inconsistencies and to minimize data discrepancies." 471 DHS noted later that the centers 
"provided inconsistent levels of detail in their responses on the 201 1 assessment and in some 

472 

cases provided incomplete responses." 

Unlike the 2010 assessment, the DHS teams did not visit the centers themselves to 
validate the answers were accurate, but instead conducted "structured telephone interviews" with 

473 

fusion center officials. During these calls DHS says the teams discussed the "identified 
issues" and gathered additional information. 474 After the data was "validated," DHS prepared 
individual reports for each fusion center, scoring each center on the basis of how many attributes 
it possessed. 75 



at why a company's giving money, it's for access," Mr. Ashley said. Mr. Bawden, the group's lobbyist, later 
clarified that Mr. Ashley meant access to the group's membership. "It's for access to the association's membership, 
just like any other professional association," Mr. Bawden said. Email from Ben Bawden to the Subcommittee 
(10/1/2012). 

467 Subcommittee interview of Ben Bawden and W. Ross Ashley III (8/21/2012). 

468 Id. 

469 Subcommittee interview of Joel Cohen (4/16/2012). 

470 "201 1 National Network of Fusion Centers, Final Report, May 2012," DHS-HSGAC-FC-057027, at 5-6. While 
72 fusion centers participated in the self-assessment, only 60 returned budget and operational cost information, and 
57 returned data on staff and their products, the report noted. 

471 Id. 

472 Response to Questions for the Record, "Hearing: The Homeland Security Department's Budget Submission for 
Fiscal Year 2013, March 21, 2012," at 13 (received 6/26/2012). 

473 "201 1 National Network of Fusion Centers, Final Report, May 2012," DHS-HSGAC-FC-057027, at 5-6. 

474 Id. 

475 Id. 



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After DHS officials completed the scoring process, they realized that five of the 
minimum attributes they had defined related to having personnel who had attended trainings that 
DHS did not yet offer, including one training which was to be on a network portal that DHS had 
not yet created. 476 In other words, DHS's lack of training and technology offerings was itself 
responsible for fusion centers' inability to achieve five of the attributes DHS considered essential 

477 

to have minimal operational capability. To remedy the situation, DHS cut those five attributes 
from its list. 478 



Even with its more limited review, DHS still found weaknesses at state and local fusion 
centers. More than half lacked a strategic plan, and nearly as many lacked a communications 
plan. Nearly a third had no analytic production plan. 479 "For the National Network to fulfill its 
potential as a fully integrated participant in the National Information Sharing Environment . . . 
individual fusion centers must further develop and institutionalize their capabilities and facilitate 
interconnectivity," the report concluded. 480 

Due to the new design of the 201 1 DHS assessment, its findings were largely non- 
comparable to the 2010 assessment conducted by PM-ISE. Therefore, it was generally not 
possible to measure progress made between the PM-ISE's 2010 findings and DHS's 2011 

48 1 

findings. Nevertheless, DHS concluded its report by stating that "fusion centers made notable 

4R9 

progress in developing their capabilities." However, it added, "significant work still remains." 
C. Despite Promises, DHS Has Not Assessed Fusion Center Performance 

DHS has repeatedly committed itself to assessing not only fusion centers' capabilities, 
but also their performance. While the 2010 and 201 1 assessments purported to examine what 
fusion centers were capable of, DHS committed to but has never attempted assessing fusion 
centers' actual contributions. 



In a presentation to Congressional oversight staff in October 201 1, DHS stated it had 
been working since September 2010 to develop "a fusion center performance management 
program, called the Fusion Center Performance Program (FCPP)." That program, the 
presentation claimed, would use "a single, integrated, data-driven process" to measure the 



476 Subcommittee interview of Joel Cohen (4/16/2012). 

477 Id. 

478 Id. 

479 "201 1 National Network of Fusion Centers, Final Report, May 2012," DHS-HSGAC-FC-057027, at vii. 

480 Id. at ix. 

481 Subcommittee of Joel Cohen (4/16/2012). The 201 1 report included a section that purported to describe the 
"maturity" of fusion centers nationwide. A diagram of the "maturity model" showed four stages - "Fundamental," 
"Emerging," "Enhanced," and "Mature." When 75 percent of fusion centers achieved certain capabilities in each 
section, according to the model, DHS would judge fusion centers overall at that level. However, the model was not 
developed until the assessment process was underway, and DHS could provide no objective basis for the thresholds 
upon which the model relied. "We want to tell a story about the maturity of the network," said Joel Cohen, who 
developed the maturity model. Explaining how he came up with the 75 percent figure, he said, "We thought two- 
thirds was too low, and higher than three-quarters was too high. You can have an intellectual debate to your heart's 
content." Subcommittee interview of Joel Cohen (7/12/2012). 

482 "201 1 National Network of Fusion Centers, Final Report, May 2012," DHS-HSGAC-FC-057027, at ix. 

483 "National Network of Fusion Centers," presentation, slide 12, (10/7/201 1) DHS-HSGAC-FC-058772 



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performance of fusion centers; the national network of fusion centers; and federal support for 
fusion centers. In February 2012, DHS I&A personnel went further, telling House and Senate 
staff that they were "implementing a Fusion Center Performance Program." 484 

When the Subcommittee sought detailed information about the FCPP, however, DHS 
admitted that no such program currently exists. In a July 2012 interview with Joel Cohen, the 
DHS official who oversaw the 2011 fusion center assessment process, he identified himself as 
the DHS official in charge of the FCPP. 

In the interview, Mr. Cohen first described the FCPP as "a variety of projects and 

485 

initiatives." Asked to elaborate, Mr. Cohen stated that the assessment process was "the 
centerpiece." 486 There was also "an exercise component," he said, that would demonstrate 

487 

whether fusion centers had the capabilities they claimed; and "all the survey stuff." The 
department was also developing performance measures, Mr. Cohen said. 

The Subcommittee requested a document outlining the FCPP. Mr. Cohen stated such a 
document did not exist. "A document is being developed," Mr. Cohen told the Subcommittee. 
"We're building the plane as we're flying it," he said. 89 

When asked about the performance measures he was developing, Mr. Cohen said that 
performance measures are "tough." 490 When asked to elaborate on the exercise component, Mr. 
Cohen said, "There is no fully-developed exercise component." 491 Mr. Cohen also told the 
Subcommittee that for the two years his office has purported to be working on the program, he 
has not had sufficient staff to make progress. 492 

D. Some DHS-Recognized Fusion Centers Do Not Exist 

One of the ongoing troubling features of DHS's fusion center efforts involves 
nonfunctional fusion centers whose very existence is a matter of dispute. In its October 2010 
report, the PM-ISE identified four fusion centers out of the 72 DHS counted that were "not 
functional at a level to receive a visit," and one which "was not operational" at all. 493 Despite 
that finding, DHS officials continued to publicly allege it was engaged with 72 fusion centers 
around the country. 



484 "State and Local Program Office (SLPO) FY 2012 Semi-Annual Briefing," DHS-HSGAC-FC-058809, slide 13 
(2/8/2012). 

485 Subcommittee interview of Joel Cohen (7/12/2012). 

486 Id. 

487 Id. 



490 Id. 

491 Id. 

492 Id. 

493 10/2010 "2010 Fusion Center Baseline Capabilities Assessment," PM-ISE, at 8, DHS-HSGAC-FC-007231. PM- 
ISE officials identified the locations of the non-operational centers as Pittsburgh, Philadelphia, South Dakota and 
Wyoming. Subcommittee interview with PM-ISE officials (9/14/2012). 



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"Today, we have a national network of 72 recognized fusion centers - one in every state 
and 22 in major urban areas - and, with Department of Homeland Security support, they are 
being woven into the national and homeland security fabric of the United States," then- 
Undersecretary for Intelligence and Analysis Bart Johnson wrote on the DHS website, in an 
October 25, 2010, essay entitled, "How Fusion Centers Help Keep America Safe." 494 

"Today, there are 72 state- and locally-run fusion centers in operation across the nation," 
DHS Secretary Napolitano told the House Homeland Security Committee in her February 201 1 

495 

testimony. 

"Today, 72 recognized fusion centers serve as focal points for the receipt, analysis, 
gathering, and sharing of threat-related information among the federal government and state, 
local, tribal, territorial and private sector partners," Secretary Napolitano stated in separate 
testimony in September 201 1 before the Senate Homeland Security and Governmental Affairs 
Committee. 496 

Asked why Secretary Napolitano and other DHS officials claimed the existence of four 
fusion centers its own assessment could not demonstrate, Undersecretary Wagner said, "My 
understanding was that they operated as virtual fusion centers." When it was noted that PM-ISE 
found that they literally were non-functional - PM-ISE said three were "not functional at a level 
to receive a visit" and one was "not operational," Ms. Wagner said, "There was no intent to 
obfuscate. It just took some of them [fusion centers] longer than others to get there." 497 

The Subcommittee examined two fusion centers which DHS has alleged to exist and has 
said it officially recognized, but whose existence was disputed by local officials or 
documentation. 

(1) Wyoming 

Since 2009, DHS has counted among its officially recognized fusion centers an entity in 
Wyoming it has referred to as the Wyoming Fusion Center. 498 In September 2009, DHS reported 



10/25/10 Johnson, Bart, "How Fusion Centers Help Keep America Safe," 
http://www.dhs.gov/blog/2010/10/25/how-fusion-centers-help-keep-america-safe 

495 Testimony of Secretary Janet Napolitano before the House Committee on Homeland Security, "Understanding 
the Homeland Threat Landscape - Considerations for the 1 12th Congress" (2/9/201 1), 

http://www.dhs.gov/news/201 1/02/09/secretary-napolitanos-testimony-understanding-homeland-threat-landscape. 

496 Testimony of DHS Secretary Janet Napolitano before the Senate Committee on Homeland Security and 
Government Affairs, "Ten Years After 9/1 1 : Are We Safer?" (9/12/201 1), 

http://www.dhs.gov/news/201 1/09/12/testimonv-secretary-ianet-napolitano-united-states-senate-committee- 
homeland . DHS has since recognized five more fusion centers, bringing the total of DHS -recognized fusion centers 
to 77. DHS web site, "Preventing Terrorism Results," http://www.dhs.gov/topic/preventing-terrorism-results , 
accessed 9/25/2012. 

497 Subcommittee interview of Caryn Wagner (9/16/2012). 

498 9/4/2009 "State and Local Fusion Center Program: Quarterly Update, Fiscal Year 2009 Report to Congress, Third 
Quarter." 



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to Congress that such a fusion center existed, and it intended to detail an intelligence official 
there. 499 

But just prior to that, in August 2009, FEMA officials issued an assessment of the state's 
progress on meeting goals associated with establishing a fusion center at "zero," or no progress, 
on any aspect of the effort. 500 

According to Wyoming state officials, their state has no fusion center and never intended 
to create one. "It confuses me," said Kebin Haller, Deputy Director for the state's Division of 
Criminal Investigation (DCI). They have a criminal intelligence center, he said, but "we've 
chosen not to refer to it as a fusion center." Neither have state officials formally designated it as 
a fusion center for DHS to recognize; they have not accepted DHS grant funds for the center, or 
participated in any DHS assessment, he said. 501 

Asked about DHS's claim to have placed a detailee at the center, Mr. Haller said, "We 
did have a DHS detailee, interestingly enough." DHS hired away one of the center's senior 
criminal analysts, Mr. Haller explained, "but they didn't really have the office space" to house 
him. Mr. Haller said DHS asked if it could leave its new hire in his old office at the Wyoming 
DCI. "We said sure, as long as we don't need that office space," Mr. Haller recalled. He said 
his division eventually needed the desk back, and DHS moved their employee to another state. 

502 

Wyoming has neither requested nor received another detailee, Mr. Haller said. 

(2) Philadelphia Fusion Center 

DHS has also counted among its recognized fusion centers the Delaware Valley 
Information Center (DVIC), which it locates in Philadelphia, Pennsylvania. The department 
has indicated plans to assign a detailee to the center; 504 and since 2006, DHS has awarded 
millions of dollars in grant funds in support of the project. 505 

In response to a 2010 survey from the Subcommittee, however, Philadelphia officials 
stated the center did not yet exist. 506 They stated DVIC was to begin operations in December 
2010. Five months later, during a May 201 1 interview, however, officials in charge of the DVIC 



499 Id. 

500 "Wyoming FY 2009 Monitoring Report," FEMA (8/18/2009). 

501 Subcommittee interview of Kebin Haller, Deputy Director, Wyoming Division of Criminal Intelligence 
(9/7/2012). 

502 Id. 

503 "State and Local Fusion Center Program: Quarterly Update, Fiscal Year 2009 Report to Congress, Second 
Quarter;" (9/4/2009) "State and Local Fusion Center Program: Quarterly Update, Fiscal Year 2009 Report to 
Congress, Third Quarter." (8/4/2009). 

504 "State and Local Fusion Center Program: Quarterly Update, Fiscal Year 2009 Report to Congress, Second 
Quarter," (8/4/2009); "State and Local Fusion Center Program: Quarterly Update, Fiscal Year 2009 Report to 
Congress, Third Quarter;" (9/4/2009); "Fusion Center Locations and Contact Information," DHS.gov, 
http://www.dhs.gov/fusion-center-locations-and-contact-information , accessed September 27, 2012. 

505 "Philadelphia Urban Area FY2009 Monitoring Report," FEMA (9/17/2009); DVIC Funding Overview, 
SEPARTF; PSI-PEMA-05-0090. 

506 Response to Subcommittee Questionnaire, Delaware Valley Intelligence Center (7/23/10), at 2, PSI-Delaware 
Valley Intelligence Center-0 1-0001. 



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project informed the Subcommittee the center had still not yet opened. Since then, the State of 

508 

Pennsylvania has frozen DHS funds associated with the project. As of August 2012, the 
center still did not physically exist. Yet, in its most recent capability assessment report on fusion 
centers, DHS again lists DVIC as a recognized fusion center. 509 

DHS's insistence on listing fusion centers with no physical presence is not only puzzling, 
but raises questions about its entire assessment process. 

E. Many Fusion Centers Do Not Prioritize Counterterrorism Efforts 

The White House, Congress and DHS itself have described fusion centers as key tools for 
gathering, analyzing, and sharing information to prevent terrorist attacks. Indeed, in 2007, 
Congress indicated DHS should consider any fusion center's commitment to doing 
counterterrorism work before detailing personnel to work there. 510 However, the Subcommittee 
investigation found some centers do not make terrorism a priority among their many efforts. 

The 2010 Subcommittee survey found that 25 of 62 responsive fusion centers, or more 
than one-third, did not mention terrorism in their mission statements. And the trend appeared to 
be moving in that direction: at least five fusion centers reported recently revising their mission 
statements in ways that emphasized public safety and anti-crime efforts, and diminished or 
removed mentions of counterterrorism. 511 

In an interview, a DHS official who helps oversee the Department's support for and 
engagement with fusion centers acknowledged that some centers were not interested in focusing 
on counterterrorism. "We have trouble getting smaller, less mature fusion centers to pay 
attention to things like counterterrorism analysis," said Joel Cohen, head of policy and planning 
for the DHS State and Local Program Office (SLPO). "They are more concerned with day-to- 

512 

day crime." 

But the trend away from prioritizing counterterrorism efforts does not appear isolated to 
smaller, "less mature" fusion centers. Indeed, statewide fusion centers and fusion centers in 
major cities indicate that they emphasize anti-crime efforts and "all-hazards" missions over an 
explicit focus on counterterrorism. 



Subcommittee interview of DVIC officials Walt Smith, Tom Elsasser, and Joseph Liciardello (5/23/2011). Since 
that interview, Mr. Liciardello has maintained he is not a DVIC official. For more information on Mr. Liciardello's 
role in the DVIC project, see Chapter V. 

508 Subcommittee interviews of Pennsylvania Emergency Management agency (11/14/2011, 11/30/2011, 8/1/2012). 

509 "201 1 National Network of Fusion Centers, Final Report, May 2012," Appendix 5, DHS-HSGAC-FC -057027. 

510 Implementing Recommendations of the 9/11 Commission Act of 2007, Pub. L. No. 110-53, § 511, 121 Stat. 317, 
318-24 (2007). http://www.gpo.gov/fdsvs/pkg/PLAW-110publ53/pdf/PLAW-110publ53.pdf . 

511 Subcommittee survey of state and local fusion centers (July 2010). 

512 Subcommittee interview of Joel Cohen (4/16/2012). 



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For instance, The Michigan Intelligence Operations Center (MIOC) changed its mission 
statement from the following: 

The State of Michigan's Intelligence Operations Center shall collect, 
evaluate, collate, and analyze information and intelligence and then, as 
appropriate, disseminate this information and intelligence to the proper 
public safety agencies so that any threat of terrorism or criminal activity 
will be successfully identified and addressed. 513 

to: 

To promote public safety by operating in a public-private partnership 
that collects, evaluates, analyzes, and disseminates information and 
intelligence in a timely and secure manner while protecting the privacy 
rights of the public. 51 

Similarly, the Nevada Threat Analysis Center (NT AC) once defined its mission with a 
stated emphasis on preventing terror: 

NT AC embraces a team effort of local, state, federal and tribal law 
enforcement, fire, health, and private sector stakeholders, in cooperation 
with the citizens of the state of Nevada, for the timely receipt, analysis, 
and dissemination of terrorism and criminal activity information relating 
to Nevada while ensuring the safety of its citizens and critical 
infrastructure. 515 

But as of August 2012, their mission statement read: 

NT AC embraces a team effort of local, state, federal, and tribal law 
enforcement, fire, health, and private sector stakeholders, in cooperation 
with the citizens of Nevada, for the timely receipt, analysis, and 
dissemination of criminal information while ensuring the safety and 
privacy rights of our citizens and critical infrastructure. 516 

These revisions reflect a general shift towards a so-called "all-crimes, all-hazards" 
approach. That trend was noted in a 2008 Congressional Research Service report which found 
fusion centers were broadening their missions to encompass all crimes and all hazards as a way 



" Michigan Intelligence Operations Center questionnaire response, (7/26/2010) PSI-Michigan Intelligence 
Operations Center-0 1-0001. 

514 Michigan Intelligence Operations Center (MIOC) website, http://www.michigan.gov/mioc , accessed Sept. 10, 
2012. 

515 Nevada Threat Analysis Center questionnaire response, (7/23/10) PSI-Nevada Threat Analysis Center-0 1-0001. 

516 "Nevada Threat Analysis Center," Nevada Department of Public Safety website, 

http://id.dps.nv.gov/programs/Nevada Threat Analysis Center %28NTAC%29/ , accessed Sept. 10, 2012. 



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to encourage participation from local agencies, qualify for a wider array of grant programs, and 
because other centers were doing it. 517 

CRS noted that the "all-crimes" approach to counterterrorism was premised on an 
assumption that would-be terrorists would commit precursor crimes before attempting an attack. 
But CRS officials questioned whether that was a valid assumption, and whether the broad "all- 
crimes" approach diverted fusion center efforts towards working on criminal and other matters 
that bore no connection to terrorism. 518 

"[0]ne can reasonably question if sophisticated terrorists, those who have received 
formal terrorism training from established international groups and may be planning catastrophic 
attacks, engage in criminal activity prior to, and in support of, a terrorist attack. Will following 
all criminal leads and terrorism tips lead to the disruption of sophisticated terrorist plots?" CRS 
asked. 519 

In fact, some fusion center officials from major jurisdictions have championed a focus on 
traditional criminal activity over terrorist plots. "Our end state is to prevent terrorism, but in my 
own community, right across the bay from San Francisco where I work, the City of Oakland, 
they've had 740 shootings to date," stated Ronald Brooks, director of the Northern California 
Regional Intelligence Center (NCRIC) in San Francisco, in a hearing before the Senate 
Homeland Security and Governmental Affairs Committee (HSGAC) in October 201 1 . "That's a 
city of 400,000. That's terror right there in our own community. And that kind of terror is one 

520 

that's experienced in big cities and small towns across the country." 

Like many other centers, Mr. Brooks' center in Oakland makes no mention of terrorism 
in its mission statement. His "all-crimes" fusion center aims to "coordinate the exchange of 
criminal intelligence, threats, and hazards and facilitate regional communication among Northern 

521 

California Law Enforcement, First Responders, Government and Private Sector Partners." An 
official with the Washington (D.C.) Regional Threat and Analysis Center (WRTAC), whose 
region includes some of the nation's most inviting terrorist targets, sounded a similar note in a 
Subcommittee interview. The D.C. fusion center was focused on "crime, crime, crime," the 
official said. "The last I checked, terrorism was still a crime." 

WRTAC 's mission statement initially included a mention of terrorism, stating the center 
was "the focal point for collection, integration, assessment, analysis, and dissemination of 
intelligence relating to terrorism, criminal activity and catastrophic events[.]" A revised mission 
statement omits any specific mention of terrorism, and commits the center to enhancing its 



517 John Rollins, "Fusion Centers: Issues and Options for Congress," (1/18/2008) CRS Report RL34070, at 21-22, 
87. 

518 Id. 

519 Id. at 68-69. 

520 "f; en Years After 9/11: A Status Report on Information Sharing," before the Senate Homeland Security and 
Governmental Affairs Committee, testimony of Ronald Brooks (10/12/2011). 

521 NCRIC website, "About NCRIC," 

https://ncric.org/default. aspx/MenuItemID/122/MenuGroup/NCRIC+Public+Contact.htm . 

522 Subcommittee visit to WRTAC, March 16, 2010. 



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partner agencies' "ability to detect credible threats to the region from all hazards and all 
crimes." 

Indeed, the PM-ISE's 2010 Baseline Capabilities Assessment of fusion centers found that 
terrorism was a low priority for most of them. "Most [fusion] centers focus on the priority 
mission of the law enforcement agency that owns/manages them; primarily analytical case 
support to drug, gang, and violent crime investigations for the geographic area of responsibility," 
the report stated. "As a result many centers struggle to build the necessary capabilities required 
to support federal counterterrorism mission requirements, specifically in the areas of intelligence 
analysis and information sharing beyond their jurisdictions." 524 

F. DHS "Success Stories" Do Not Demonstrate Centers' 
Value to Counterterrorism Efforts 

On its web site, DHS has devoted a page to fusion center "success stories." On that 
page, DHS includes many events unrelated to terrorism in a long list of fusion center 
"successes." DHS praises, for example, fusion center efforts that have helped to reduce 
automobile thefts, apprehend a man suspected of kidnapping and rape, and bust up a drug ring. 526 

While those anticrime successes are notable, they do not advance the DHS 
counterterrorism mission; they do not fulfill the promise federal officials made to Congress and 
the public that the significant taxpayer support directed to fusion centers would aid in the fight 
against terror; and they do not meet the expectations set by legislative and executive mandates 
which make clear both branches expected fusion centers to perform as conduits of terrorism 
information-sharing to and from the federal government. 

To evaluate fusion centers' contributions to federal counterterrorism efforts, the 
Subcommittee asked DHS to provide its best examples of how fusion centers have made such 
contributions. In response, DHS provided a handful of examples, although only a few related to 
actual terrorist plots. The Subcommittee examined four of them. It was unable to confirm that 
the fusion centers contributions were as significant as DHS portrayed them; were unique to the 
intelligence and analytical work expected of fusion centers; or would not have occurred absent a 
fusion center. 

(1) Najubullah Zazi Case 

On its website and in presentations to Congress, DHS has cited the contributions of the 
Colorado Information Analysis Center (CIAC) to the investigation into Najibullah Zazi, an 
admitted terrorist. In 2009, the 25-year-old Afghan immigrant traveled from Colorado to New 
York City, where he has admitted that he planned to blow himself up on the subway around the 



323 WRTAC Response to Subcommittee Questionnaire, (2/13/2012) PSI-WRTAC-02-0004 

524 "2010 Fusion Center Baseline Capabilities Assessment," PM-ISE, at 3, (10/2010) DHS-HSGAC-FC-007032. 

525 "Fusion Center Success Stories," DHS.gov, http://www.dhs.gov/fusion-center-success-stories , accessed August 
21,2012. 



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anniversary of the 9/1 1 attacks. The FBI learned of his intention and arrested Mr. Zazi on 
September 19. 527 

"[I]n the Zazi plot to bomb the New York subway, it was a fusion center near Denver that 
played the key role in 'fusing' the information that came from the public with evidence that came 
in following the suspect's arrest by the FBI," DHS Secretary Janet Napolitano stated in a 
September 2010 speech. 

The DHS website is more circumspect. "The CIAC provided analytic support to the 
Denver FBI and the Department of Homeland Security regarding the suspicious activity reported 
to the CIAC through the public website and 1-800 number," DHS states on its site. "CIAC 
provided personnel to assist the Denver FBI in the investigation and support the field operations. 
CIAC analysts also assisted in the review and analysis of the evidence obtained during the 
execution of the search and arrest warrants." The department also notes that CIAC officials 
"addressed media inquiries" about the investigation and the threats it involved. 

When the Subcommittee asked CIAC itself for a more detailed explanation of its role in 

530 

the Zazi case, the center provided a four-page summary. CIAC did not claim to have "played 

531 

the key role" in "fusing" evidence from the case with information from the public. ~ The center 
summarized its analytical contributions as "assisting in open source and law enforcement 
research" by checking databases. CIAC personnel also "assisted in the review of the information 

con 

obtained through search warrants," the center's summary stated. Additionally, the 
Subcommittee confirmed, the center responded to media inquiries. 

In its summary, CIAC explained that most of its contributions to the case came from state 
troopers who were assigned to the center. Of the 605 hours CIAC states its personnel dedicated 
to assisting the FBI in the Zazi case between September 9 and September 16, 2009, only 60 of 
those hours came from its analysts. Troopers did the rest, including 145 hours of analytical work 
and 400 hours of operational work, including vehicle stops and augmenting the Colorado 

533 

Governor's security detail. The trooper who accounted for CIAC's largest contribution to the 
investigation - 120 hours in a one- week period - was a state trooper who was part of the 



"Najibullah Zazi Pleads Guilty to Conspiracy to Use Explosives Against Persons or Property in U.S.," press 
release, Department of Justice, (2/22/2010); See also Sulzberger, A.G., and William K. Rashbaum, "Guilty Plea in 
Plot to Bomb New York Subway," New York Times, (2/22/2010), 

http://www.nvtimes.com/2010/02/23/nyregion/23terror.html ; Sulzberger, A.G., "Imam Snared in Terror Plot Admits 
He Lied to FBI," New York Times, March 4, 2010, http://www.nvtimes.com/2010/03/05/nyregion/05terror.html . 
528 "Remarks as Prepared by Secretary Napolitano to New York City First Responders" (9/20/2010), DHS Website, 
http://www.dhs.gov/news/2010/09/10/remarks-prepared-secretarv-napolitano-new-vork-citv-first-responders , 
accessed 9/18/2012. 

529 "Fusion Center Success Stories," DHS.gov, http://www.dhs.gov/fusion-center-success-stories , accessed August 
21,2012. 

530 "Najibullah Zazi Case," April 201 1, Colorado Information Analysis Center. 

531 The CIAC summary notes, however, that two troopers received calls from citizens "reporting concerns and 
events in-which they deemed suspicious [sic] after the Zazi case became public." The first news stories regarding 
the Zazi case appeared on Sept. 16, 2009. 

532 "Najibullah Zazi Case," April 201 1, Colorado Information Analysis Center. 



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troopers' "CIAC unit," but was also assigned to the FBI Joint Terrorism Task Force (JTTF), 
which was handling the investigation, the center's director explained to the Subcommittee. 534 

This examination does not diminish Colorado officials' support of the FBI investigation 
into Najibullah Zazi. But it does indicate that much of the contribution attributed to CIAC came 
from state troopers, and could have - hopefully, would have - occurred absent a fusion center. 



(2) Faisal Shahzad Case - NYSIC 



On May 1, 2010, Faisal Shahzad attempted to detonate a car bomb in New York City's 
Times Square. Mr. Shahzad' s attempt was foiled by alert street vendors, who noticed smoke 
coming from a parked vehicle and notified authorities. DHS Customs and Border Patrol agents 
apprehended Mr. Shahzad two days later on May 3, after he successfully boarded a commercial 
flight bound for Dubai, UAE. He eventually pled guilty to charges arising from the attempted 
attack. 535 



On its web site, DHS cites as a fusion center success the contributions made by the New 
York State Intelligence Center (NYSIC) in Latham, New York, to the FBI's Shahzad case. 536 
The department's description omits a small detail, however, which has the effect of potentially 
mischaracterizing the value of the center's contribution. 

"In New York, an alert AAA employee filed a SAR [Suspicious Activity Report] with the 
New York State Intelligence Center [(NYSIC)] regarding a call on May 2, 2010 - when Shahzad 
called for assistance because he had locked his keys inside the vehicle," DHS states on its web 

537 

site. While that information may have been useful in building the case against the would-be 
bomber, it neither helped disrupt his plans nor hastened his capture. According to NYSIC, it 
received the information from AAA on May 4, the day after Mr. Shahzad' s dramatic airport 
arrest. The Department does not disclose that later date, allowing a reader to believe the 
information was shared by the fusion center on the same day as the call. NYSIC included the 

538 

later date in a narrative it provided to the Subcommittee. 

NYSIC also noted that it assisted the FBI investigation by conducting database searches 

on 

for vehicle identification numbers and Department of Motor Vehicles (DMV) photographs. 
The fusion center was uniquely able to provide DMV photographs because it is currently the 
only other entity with which the New York State Department of Motor Vehicles shares the 



Email from Capt. Steve Garcia, CIAC Director, to Subcommittee, "Subject: Follow-up inquiry from PSI" 
(8/33/2012), PSI-CIAC-03-0001. 

535 "Faisal Shahzad Pleads Guilty in Manhattan Federal Court to 10 Federal Crimes Arising from Attempted Car 
Bombing in Times Square," Press release, U.S. Department of Justice, June 21, 2010, 
http://www.iustice.gov/opa/pr/2010/June/10-ag-721.html . 

536 "Fusion Center Success Stories," DHS.gov, http://www.dhs.gov/fusion-center-success-stories , accessed August 
21,2012. 

537 Id. 

538 Letter from NY State Police Capt. Douglas R Keyer Jr. to the Subcommittee, Mar. 29, 201 1. NYSIC 
characterized the May 4 AAA call as "an important lead [for the FBI] regarding the second vehicle used by 
Shahzad." 

539 Letter from NY State Police Capt. Douglas R Keyer Jr. to the Subcommittee, Mar. 29, 201 1. 



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pictures, according to a NYSIC official. "New York is one of the few states that doesn't make 
DMV photos readily available to law enforcement," Mr. Timothy Parry of the New York State 
Police told the Subcommittee. 541 



In its recounting, NYSIC also noted it "sent out teletype messages nationwide on the 
National Crime Information Center (NCIC) network requesting all agencies to conduct [License 
Plate Reader] checks through their systems," and send positive hits to NYSIC. However, the 
NCIC system is a Department of Justice network that predates fusion centers, and even DHS 
itself, and a NYSIC official told the Subcommittee the FBI may have been able to utilize NCIC 
on its own. "Could they do it? Yes. Is it as easily and quickly done? No. [We are] trying to 
make it more streamlined and efficient," he said. 



(3) Florida Fusion Center 



In addition to the work performed by NYSIC, DHS cites on its webpage of fusion center 
successes efforts by the Florida Fusion Center (FFC) in the Shahzad case. DHS does not 
characterize the FFC's work as making a significant contribution to the case, and the facts it cites 
are corroborated by the State of Florida's own comments provided to the Subcommittee. 
Following the May 3 arrest of Faisal Shahzad, FFC personnel "immediately began to query state 
databases seeking any association with Shahzad," according to FFC Director Robert LeFiles. 543 
The center identified two individuals having possible associations with Mr. Shahzad, and passed 
the information to the FBI JTTF pursuing the case. The information was used in a finished 
intelligence product, but nothing further was reported by either FFC or DHS about the leads. 544 
The information does not appear to have played any key role in the Shahzad case. 



(4) Francis "Schaeffer" Cox Case 



DHS also pointed to work by the Alaska Information Analysis Center (AKIAC) 
regarding Francis "Schaeffer" Cox, an Alaskan militia leader who was arrested in March 
201 1, 545 and convicted in June 2012 on charges stemming from a murder plot against federal 
officials. 546 



In September 2012, the Department asserted the Alaska center had played an important 
role in disrupting Mr. Cox's plans. "From December 2010 through February 201 1, the Alaska 
Information Analysis Center (AKIAC) provided consequential information that assisted an FBI 
Anchorage Field Office investigation that culminated in the arrest and conviction of a Sovereign 
Citizen/Militia Leader and two associates," DHS told the Subcommittee. 



Subcommittee interview of Timothy Parry, senior investigator, New York State Police (9/6/2012). 

541 Id. 

542 Id. 

543 Correspondence from FFC Director Robert LeFiles to the Subcommittee, March 24, 201 1, Florida Fusion Center 
02-0001. 

544 Id. 

545 Press release, "Five Arrested for Conspiracy against Troopers, Judges," Alaska State Troopers (3/10/2011), 
http://www.dps.state.ak.us/pio/docs/Press/201 1 /Conspiracy Arrest 03 1 1 1 1 .pdf . 

546 Press release, "Guilty Verdicts in USA v. Cox, Barney and Vernon," U.S. Attorney for the District of Alaska, 
(6/19/2012) http://www.iustice.gov/usao/ak/news/2012/June 2012/Francis%20Schaeffer%20Cox.html 



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Alaska officials may have provided useful information to the federal investigation of Mr. 
Cox. In a September 2012 interview with the Subcommittee, Lt. Rex Leath, an Alaska State 
Trooper, said that in late 2010, state law enforcement officials collected information about Mr. 
Cox and his associates from several local law enforcement agencies around Alaska, and shared it 
all with the bureau. They learned Mr. Cox had been arrested for domestic assault, that he may 
have been booby-trapping his house in case law enforcement visited, that Mr. Cox's associates 
were conducting surveillance of off-duty police officers, and that Mr. Cox had stationed armed 
guards around his house. 547 "This dynamic started to develop, we would keep tabs on local law 
enforcement [information], and we would pass it on to the [FBI's] JTTF [Joint Terrorism Task 
Force]," Lt. Leath said. Some of that information was later cited in testimony by an FBI agent at 
Mr. Cox's trial. 548 



However, in his interview with the Subcommittee, Lt. Leath explained that that 
information- sharing was done not by officials at the fusion center, but by those at the state 
troopers' criminal intelligence unit, in conjunction with local law enforcement and the local 
JTTF. The trooper criminal intelligence unit had the lead on the case, Lt. Leath said. 

Lt. Leath, who is the AKIAC director, told the Subcommittee that his fusion center put 
out a request for information from other states on Mr. Cox in early 201 1, "around January." 549 
Lt. Leath said the center learned of ties between Mr. Cox and other states, including Alabama, 
Michigan and Montana - ties Lt. Leath said indicated "funding, training, and verbal 
encouragement." 550 

The fusion center compiled the information into an intelligence report, 551 and shared it 
with the FBI in Anchorage that January, Lt. Leath said. "As soon as we got that information, it 
got the attention of the local FBI office," Lt. Leath said. "[T]hat's when the FBI got involved." 

However, the FBI had been actively investigating Mr. Cox for months prior, according to 
news accounts. The bureau's Anchorage office reportedly began a preliminary investigation into 

552 553 

Mr. Cox in February 2010. Agents utilized two confidential informants against Mr. Cox, 
one of whom was responsible for more than 100 hours of surreptitious recordings, including one 
of an "initiation ceremony" into Mr. Cox's militia in August 20 10. 554 

In an October 2012 letter to the Subcommittee, Lt. Leath stated that AKIAC itself had 
been gathering and documenting information about Mr. Cox for almost a year before it compiled 



Subcommittee interview of Lex Leath (9/26/2012). 

548 "Speeches put militia leader Schaeffer Cox on FBI radar," Richard Mauer, Anchorage Daily News (5/30/2012). 

549 Subcommittee interview of Lex Leath (9/26/2012). 

550 Id. 

551 "HIR/AK-0001-11, TERRORISM WATCHLIST— Alaska Militia Leader Continues Violent Rhetoric," (1/2011), 
PSI-AKIAC -01-000001. 

552 "Speeches put militia leader Schaeffer Cox on FBI radar," Richard Mauer, Anchorage Daily News (5/30/2012), 
http ://w w w. adn. com/20 1 2/05/29/248445 1 / speeches -put-militia-leader-on. html . 

553 "Informants aided FBI in militia probe, court documents show," Associated Press, (3/29/201 1), 
http://www.adn.com/2011/03/29/1781500/informants-aided-fbi-in-militia.html . 

554 "Militia leader told volunteers to be ready to shoot to kill agents," Richard Mauer, Anchorage Daily News 
(5/22/2012), http://www.adn.com/2012/05/21/2474525/militia-leader-told-his-squad.html . 



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its January 201 1 intelligence report. "[T]he AKIAC learned of these acts [by Mr. Cox] and 
began documenting them in early 2010," Lt. Leath wrote. 555 

In this case, local, state and federal officials appear to have engaged in useful 
information-sharing. Mr. Cox and his associates were arrested and convicted, and lives were 
possibly saved. However, it is not clear the role the state fusion center played in the process, or 
if it was as important or influential as DHS has alleged. 556 

G. Fusion Centers May Have Hindered, Not Aided, 
Federal Counterterrorism Efforts 

Fusion centers have also made significant intelligence errors, with embarrassing results 
for themselves and the Department. Three examples of these errors - involving both faulty 
intelligence analysis and reporting - have led DHS to misinform decision-makers and prompt 
clarifications and apologies from fusion center officials. 

(1) Russian "Cyberattack" in Illinois 

On November 10, 2011, the Illinois Statewide Terrorism & Intelligence Center (STIC) 
published a report alerting officials that a hacker in Russia had stolen an unknown number of 
usernames and passwords to sensitive utility control systems, and used that information to hack 
into a local water district's computerized control system. Once inside the system, the fusion 
center report alleged, the hacker sent commands which caused a water pump to burn out. 

'An information technology services and computer repair company . . . determined the 
system had been remotely hacked into from an Internet Provider (IP) address located in Russia," 
the fusion center's report stated. "It is believed the hackers had acquired unauthorized access to 
the software company's database and retrieved the usernames and passwords of various [control] 

ceo 

systems, including the water district's system." 

Although it may sound like a minor prank, the intrusion would have represented a 
significant and troubling event, had it been real. Earlier that year, U.S. Department of Defense 
officials stated that the United States could treat such cyberattacks, if they caused widespread 
casualties, as acts of war. 559 The Illinois attack, which purportedly involved exercising remote 
control over a U.S. water system, would have been the first known attack of its kind on a U.S. 
facility, and was considered for a time to be "a major new development in cybersecurity." 560 



Letter from Lt. Rex Leath to the Subcommittee (10/1/2012) 

556 DHS reponse to Subcommittee inquiry, DHS-HSGAC-FC-059981. 

557 Subcommittee interview of DHS (12/13/2011). 

558 Statewide Terrorism & Intelligence Center, "Daily Intelligence Notes," November 10, 2011, PSI-Illinois State 
Police-0 1-0003. 

559 "Cyberwar Plan Has New Focus On Deterrence," Wall Street Journal , Julian E. Barnes and Siobhan Gorman 
(7/15/201 1); "Cyber Combat: Act of War," Wall Street Journal, Siobhan Gorman and Julian E. Barnes (5/30/201 1) 

560 "Foreign hackers targeted U.S. water plant in apparent malicious cyber attack, expert says," Washington Post , 
Ellen Nakashima (1 1/18/201 1), http://www.washingtonpost.com/blogs/checkpoint-washington/post/foreign- 
hackers-broke-into-illinois-water-plant-control-svstem-industrv-expert-says/201 1/1 1/18/gIQAgmTZYN blog.html . 



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In truth, there was no intrusion, and DHS investigators eventually concluded as much. 561 
The so-called "intrusion" from Russia was actually an incident of legitimate remote computer 
access by a U.S. network technician who was working while on a family vacation. 562 Making 
the intrusion allegations all the more perplexing, the contractor had logged on from Russia in 
June, five months before the pump broke; and although the access had been under his username 
and password, no one from the fusion center, the water utility or DHS had contacted him to find 
out if he had logged on from Russia. 

"A quick and simple phone call to me right away would have defused the whole thing 
immediately," the contractor told a reporter after the report had been discredited. "All I did was 
I logged on." 563 

In addition to the fusion center report, DHS intelligence officials issued their own 
intelligence report on the alleged hacking incident, publishing it five days after the Illinois fusion 
center published its own, on November 10, 201 1. 56 Like the fusion center report, DHS stated 
the allegations as fact, not as theory, claim or hunch - none of which are reportable under DHS 
reporting guidelines. The author, a DHS Senior Reports Officer with I&A's Reporting Branch, 
drafted the bulletin. 565 He wrote that his report was based on "first and secondhand knowledge 
of information . . . deemed reliable," and used no language indicating the "attack" was a mixture 
of allegation and conjecture. 566 

"[T]he Springfield, Illinois Curran- Gardner Public Water District's Supervisory Control 
and Data Acquisition (SCAD A) system experienced a network intrusion from a Russian IP 
address," the briefing slide stated. "The perpetrator used an authorized user account of an 
employee from an identified US business that developed and installed the SCADA system. 
System controls were manipulated resulting in a pump burnout." 567 

Apparently aware of how important such an event could have been, had it been real, DHS 
intelligence officials included the false allegations - stated as fact - in a daily intelligence 
briefing that went to Congress and the intelligence community. 568 

After receiving the Illinois center's November 10 report, the FBI opened an investigation 
into the allegations. A week later, after receiving DHS's own intelligence report on the hacking 
claims, the Department's Cyber Emergency Response Team (CERT) 569 also began investigating 



561 "Illinois Water Pump Failure Report," DHS, ICSB-1 1-327-01, (11/23/2011) DHS-HSGAC-FC-019824. 

562 "Working on his vacation in Russia, contractor touches off false report of cyberattack," Associated Press 
(12/1/2011). 

563 Id. 

564 "NETWORK INTRUSION INTO A SPRINGFIELD, Illinois Public Water District's SCADA system, originated 
in Russia, resulted in a pump burnout," IIR-4-007-0104-12, Nov. 15, 201 1, DHS-HSGAC-FC-019826. 
"HIRs[/IIRs] are not analytic products and should present factual information, rather than theories or conclusions." 
Standard Operating Procedure for Homeland Intelligence Report Production, 6/25/10, DHS-FC-HSGAC-056474. 

565 Subcommittee interview of Anne Wessel, Chuck Robinson (12/13/2011). 

566 "NETWORK INTRUSION INTO A SPRINGFIELD, Illinois Public Water District's SCADA system, originated 
in Russia, resulted in a pump burnout," IIR-4-007-0104-12, Nov. 15, 201 1, DHS-HSGAC-FC-019826. 

567 Daily Intelligence Highlights, "Illinois: Water System Disrupted by Cyber Intrusion," (1 1/15/201 1) 

568 DHS response to Subcommittee inquiry, (9/19/2012) DHS-HSGAC-FC-059955. 

569 CERT is part of DHS' National Protection and Programs Directorate, separate from I&A. 



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the incident. On November 23, 201 1, CERT issued its own report with this finding: "After 
detailed analysis of all available data, ICS-CERT and the FBI found no evidence of a cyber 
intrusion into the SCADA system of the Curran-Gardner Public Water District in Springfield, 
Illinois." 570 

"In addition," CERT's report continued, "there is no evidence to support claims made in 
the initial Illinois STIC report - which was based on raw, unconfirmed data and subsequently 
leaked to the media - that any credentials were stolen, or that the vendor was involved in any 
malicious activity that led to a pump failure at the water plant. In addition, DHS and the FBI 
have concluded that there was no malicious or unauthorized traffic from Russia or any foreign 

571 

entities, as previously reported." 

Almost no part of the initial reports of the incident had been accurate - not the fusion 
center report, or DHS's own intelligence report, or its intelligence briefing. The only fact they 
got right was that a water pump in a small Illinois water district had burned out. 

DHS I&A did not subsequently issue a correction or notification of its erroneous 
reporting. In an interview with the Subcommittee, DHS officials responsible for the reporting 
incident said they believed there was no need to issue a correction for the faulty report or 

572 

briefing slide, because "they are not finished intelligence." They agreed that the report did not 
include caveats for its reporting, and that it was "not typical" for such reports to state 
uncorroborated claims and hypotheses as fact. But "there is a premium for getting IIRs out," one 
official explained. "Analytical judgements are saved." Despite its inaccuracies and sloppy 
phrasing, DHS officials characterized the IIR as a success. "[It did] exactly what it's supposed to 
do — generate interest." 

(2) Shooting of Representative Giffords and 18 Others 

A second recent example of flawed information issued by a fusion center involves the 
Arizona Counter Terrorism Information Center (ACTIC) about a high-profile shooting. This 
example showed how a center's weak analysis could actually hinder anti-terrorism and law 
enforcement efforts. 

In January 201 1, Jared Loughner opened fire at a public event in Tucson, Arizona. He 
shot and killed six people and wounded 13 others, including Arizona Representative Gabrielle 
Giffords. 574 Fox News reported that an ACTIC document indicated that the center's analysts had 
a "strong suspicion" that Mr. Loughner was connected to American Renaissance, which the 



3/u "ICS-CERT INFORMATION BULLETIN: ICSB-1 1-327-01— ILLINOIS WATER PUMP FAILURE 
REPORT," Industrial Control Systems Cyber Emergency Response Team (ICS-CERT), November 23, 201 1, DHS- 
HSGAC-FC-019824. 

571 Id. 

572 Subcommittee interview of Anne Wessel, Chuck Robinson (12/13/201 1). 

573 Id. 

574 "Jared Lee Laughner Pleads Guilty to Federal Charges in Tucson Shooting," Department of Justice press release, 
(8/7/2012), http://www.iustice.gov/opa/pr/2012/August/12-crm-983.html ; "Jared Loughner, Ariz, shooting suspect, 
pleads guilty to 19 counts," CBSNews.com (8/7/2012) http://www.cbsnews.com/8301-504083 162-57488644- 
504083/iared-loughner-ariz-shooting-suspect-pleads-guiltv-pleads-guilty-to-19-counts/ . 



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document termed an anti-Semitic, anti-government group. The memo stated then- 
Representative Giffords was "the first Jewish female elected to such a high position in the US 
government," suggesting that was a possible reason Mr. Loughner had targeted her. 576 

Closer scrutiny of the ACTIC document's claims revealed that many were false. Ms. 
Giffords was not the first Jewish female elected to Congress; the alleged anti-government, anti- 
Semitic, white supremacist group, American Renaissance, says it is neither anti-Semitic nor anti- 
government, nor even a membership organization. American Renaissance was instead a 

577 

newsletter, and its publishers quickly confirmed Mr. Loughner did not subscribe. 

In the wake of reports debunking the analysts' assertions, the ACTIC director backed 
away from the document, characterizing it as a "quick summary" that "was never intended for 

578 

public dissemination." 

ACTIC "just didn't have its facts straight," concluded one news analysis, which went on 
to question why the fusion center was attempting to participate in a criminal investigation. 
"Presumably, law enforcement authorities in Tucson and from the FBI were on the case when the 
memo was written," the analysis reasoned. "One wonders why the fusion center was involved at 
all, but clearly, it was operating out of its league." 579 



(3) Missouri MIAC Militia Report 



A third example of fusion center missteps took place in February 2009 when a 
problematic analysis issued by the Missouri Information Analysis Center (MIAC) provoked 
public outrage. 



Deemed a "strategic report," "The Modern Militia Movement" attempted to provide a 

580 

summary analysis of the recent history of violent militia organizations in the United States. 

581 

The report was poorly researched and written. It attempted to show connections between 
certain Constitutionally protected, non- violent political activity and a tendency towards violent 
extremism. 

For instance, the report alleged that "militia members most commonly associate with 3" 
party political groups," including the Libertarian Party. It stated that "these [militia] members 



"DHS Memo Suggests Shooter May Be Linked to Racist Organization," Jennifer Griffin, FoxNews.com 
(1/9/2011), http://politics.blogs.foxnews.com/201 1/01/09/dhs-memo-suggests-shooter-mav-be-linked-racist- 
organization . 

576 "Jared Loughner's supremacists tie debunked," POLITICO, Kenneth Vogel (1/11/2011), 
http://www.politico.com/news/stories/01 1 1/47438. html . 

577 Id. 

578 Id.. 

579 Harris, Shane, "ANALYSIS: Intelligence File One Bad Apple," Government Executive, Apr. 1, 201 1, 
http://www.govexec.com/features/041 1-01/041 l-01adif.htm . 

580 llThe Modern Militia Movement, MIAC Strategic Report," Missouri Intelligence Analysis Center (MIAC), 
(2/20/09), http://www.news-leader.com/assets/pdf/DQ131242323.PDF , accessed 9/26/2012. 

581 Among other errors, the document reportedly misspelled President Barack Obama's first name, and contained 
sentences reproduced verbatim from other sources without attribution. See Livengood, Chad, "Top law officials 
defend embattled MIAC agency," Springfield (Mo.) News-Leader, Sept. 10, 2009. 



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are usually supporters of . . . Ron Paul, Chuck Baldwin, and Bob Barr." Further, it claimed 
militia members might display signs, cartoons or bumper stickers featuring "anti-government 
rhetoric," as well as "anti-immigration, and anti-abortion" material. Most surprising to some, it 
identified as "the most common symbol displayed by militia members" the so-called "Gadsden 

582 

Flag," featuring a coiled snake and the words, "Don't Tread on Me." As the report properly 
noted, the flag was designed by a U.S. General, Christopher Gadsden, and first gained notice in 
the 1700s. And while it may hold significance to members of the militia movement, it is 
considered by many to be a symbol of American patriotism, and a popular symbol at Tea Party 
rallies. 

The report, which became public in March 2009, caused an avalanche of criticism of 
MIAC, as well as the Missouri Department of Public Safety, which oversaw the center. One 
former state government official said the report "looks like a Missouri State University fraternity 

*~ 583 

brother wrote something and put it on state letterhead and sent it out." ~ The department's chief 
issued public apologies to Mr. Paul, Mr. Baldwin and Mr. Barr, stating in letters to the men, "I 
regret that those comments were ultimately included in the final report[.]" 

These three examples of poor quality intelligence reports by fusion centers suggest some 
centers do not qualify as the counterterrorism successes portrayed by DHS. Fusion centers are 
controlled by state and local agencies, and staffed largely by state and local personnel. It should 
be no surprise, nor should it necessarily be a cause for concern, that they are primarily concerned 
with addressing state and local needs. 

The federal government has also repeatedly stated, however, its expectation that fusion 
centers be capable of contributing to the federal counterterrorism mission. It is that expectation 
that has been used to justify the federal government's strong and growing support for fusion 
centers, from providing hundreds of millions of dollars in federal grant funds and dispatching 
federal personnel, to installing data connectivity, and supplying secure equipment and facilities 
capable of handling classified information. 

Unfortunately, despite a significant investment of resources and time, fusion centers 
today appear to be largely ineffective participants in the federal counterterrorism mission. Much 
of the blame lies with DHS, which has failed to adequately implement a fusion center program 
that would produce the results it promised. But significant responsibility for these failures also 
lies with Congress, which has repeatedly chosen to support and praise fusion center efforts, 
without providing the oversight and direction necessary to make sure those efforts were cost 
effective and useful. 



"The Modern Militia Movement, MIAC Strategic Report," Missouri Intelligence Analysis Center (MIAC), 
(2/20/09), http://www.news-leader.com/assets/pdf/DQ131242323.PDF , accessed 9/26/2012. 
583 Livingood, Chad, "Agency apologizes for militia report on candidates," Springfield (Mo.) News-Leader, March 
25,2009. 



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VII. RECOMMENDATIONS 

• Congress should clarify the purpose of providing federal monetary and other 
support for DHS' fusion center efforts. The Subcommittee's investigation could not 
verify that the statutory basis for DHS' involvement in fusion centers - to strengthen 
federal counterterrorism efforts - was reflected in the department's efforts. Congress 
should require DHS to conform its efforts to match its counterterrorism statutory purpose, 
or redefine DHS' fusion center mission. 

• DHS should reform its intelligence reporting efforts at state and local fusion centers 
to eliminate duplication. DHS reporting from fusion centers duplicates - often poorly - 
better intelligence- sharing processes undertaken by other agencies. The Joint Terrorism 
Task Forces receive threat-related information; the National SAR Initiative shares 
suspicious activity reports from state and locals; and the Terrorist Screening Center 
gathers information on state and local officials' interactions with individuals in the 
National Counter Terrorism Center's TIDE database. 

• DHS should improve its training of intelligence reporters. DHS must ensure that any 
DHS personnel engaged in reporting intelligence information from within the United 
States be adequately trained and certified to prevent violations of U.S. law or DHS 
guidelines, policy or regulations. 

• DHS should strictly align fusion center grant funding to meet federal needs. When 
FEMA gives states and cities grant funds for a fusion center, it should not allow those 
dollars to be spent on items that do not directly contribute to improving the fusion 
center's abilities to contribute to its federal mission of counterterrorism. 

• DHS should track how much money it gives to each fusion center. FEMA should 
identify how much money it grants to states and urban areas for direct or indirect support 
of each individual fusion center, and report those amounts annually to Congress. 

• PM-ISE should evaluate fusion center capabilities and performance. At the request 
of DHS, the Program Manager for the Information Sharing Environment (PM-ISE) in the 
Office of the Director of National Intelligence conducted a national assessment of fusion 
center capabilities that produced useful findings, and PM-ISE should use that model to 
conduct future evaluations. In addition, it should begin to evaluate fusion centers' 
performance as participants in federal counterterrorism information-sharing efforts. 

• DHS should link funding of each fusion center to its value and performance. 

Granting funds for state and local fusion center efforts year after year, without expecting 
or even examining the results received from previous grants, provides no mechanism to 
ensure federal taxpayers receive a return on their investments. 

• DHS should timely disclose to Congress significant problems within its operations. 

Serious issues plagued DHS fusion center efforts for years, yet officials were reluctant to 
share them with Congress. Even when asked about these problems, DHS avoided 



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acknowledging the problems, initially withheld documents, and repeatedly resisted 
Subcommittee requests, which unnecessarily prolonged the Subcommittee investigation. 

• DHS should align its practices and guidelines to protect civil liberties, so they adhere 
to the Constitution, federal law, and its statutory mission. DHS should strengthen its 
protections to prevent DHS personnel from improperly collecting and retaining 
intelligence on Constitutionally protected activity. It should not retain inappropriate and 
illegal reporting. It should strictly enforce policies, and hold all of its employees to the 
highest standards, including by promptly barring poorly performing personnel from 
issuing domestic intelligence reports involving Americans. 



# # # 



Excerpt from Department of Justice, Global Justice Information Sharing Initiative, 
Baseline Capabilities for State and Major Urban Area Fusion Centers, 
September 2008 



APPENDIX A 



Fusion Center Capability Areas 



OCX 




I 



Fusion Process Capabilities 



I 



"Adhere to the National Criminal Intelligence 

Sharing Plan (NCISP) and other sector-specific 

information sharing plans, and perform all steps of 

the intelligence and fusion processes. " 

Guideline 1, Fusion Center Guidelines. 

The Fusion Process capabilities identify those capabilities and 
standards necessary to perform the steps of the Intelligence 
Process within a fusion center, including the gathering, 
analysis, and dissemination of information and intelligence. 
Though the steps and actions of the Fusion Process do not 
comprehensively mirror the steps of the Intelligence Process, 
the Intelligence Process provides the foundation to carry 
out the Fusion Process and assist in the identification of 
the capabilities needed to successfully complete the Fusion 
Process. 



The Intelligence Process 




The Intelligence Process is defined in the NCISP and 
incorporated into Guideline 1 of the Fusion Center 
Guidelines. 

For purposes of baseline capabilities, the Fusion Process 
capability areas are modified to be: 

• Planning and Requirements Development 

• Information Gathering/Collection and Recognition 
of Indicators and Warnings 

• Processing and Collation of Information 

• Intelligence Analysis and Production 

• Intelligence/Information Dissemination 

• Reevaluation 

The following capabilities address the plans and their 
associated policies, standards, processes, and procedures 
(collectively "procedures") needed to perform various 
aspects of the Fusion Process: the gathering, processing, 
analyzing, and disseminating of terrorism, homeland 
security, and law enforcement information. For these 
capabilities to be considered achieved or accomplished, 
the plans and procedures should be documented and 
provided to appropriate center personnel and partners. 
Though the types of plans and procedures are broken 
down by topic, they are in practice integrated aspects of 
the Fusion Process; therefore, many of these plans should 
be developed concurrently to the extent possible. In 
many cases, the resulting plans and procedures may not be 
separate documents but may be individual components of a 
larger document, such as a center's Concept of Operations, 
Standard Operating Procedures, or Policies and Procedures 
Manual. 

The following capabilities do not include capabilities 
that are otherwise addressed in Section II. Management 
and Administrative Capabilities (e.g., Information Privacy 
Protections, Security, Information Technology). 



Baseline Capabilities for State and Major Urban Area Fusion Centers 



11 




A. Planning and 
Requirements 
Development 

The Planning and Requirements Development 
stage "lays the foundation for the types of 
information that will be collected. " 
-Guideline I, Fusion Center Guidelines, p. 21. 

1. Intrastate Coordination— In developing 
and implementing all Fusion Process- 
related plans and procedures, the center 
shall coordinate with other fusion 
centers (the designated state fusion 
center and/or any UASI fusion center(s)) 
within its state to identify the roles and 
responsibilities of each center in carrying 



out the Fusion Process (gathering, 
processing, analyzing, and disseminating 
of terrorism, homeland security, and law 
enforcement information) on a statewide 
basis. 

a. Identify and incorporate local and tribal law 
enforcement, homeland security, or other 
discipline analytic centers that do not meet the 
definition of a fusion center but are within the 
fusion center's geographic area of responsibility, 
and develop and maintain coordination 
procedures and communication methodologies. 

b. The plan should address the further dissemination 
of federally generated alert, warning, and 
notification messages, bulletins, and situational 
reports, including the identification and 
establishment of a communications platform 

to support the timely dissemination of these 
products. 

c. The plan should clearly identify who is responsible 
for disseminating what types of products and to 
whom (which local, tribal, and federal authorities; 
the private sector; and the general public, as 
appropriate), in order to reduce duplicative 
dissemination to the extent possible. 



2. Risk Assessment — Fusion centers shall 
conduct or contribute to a statewide and/ 
or regional risk assessment that identifies 
and prioritizes threats, vulnerabilities, 
and consequences at regular intervals. 

a. Use available national and statewide risk 
assessments and other relevant products that 
identify patterns and trends reflective of emerging 
threats in the development of statewide and 
regional risk assessments. 

b. Develop site-specific and topical risk assessments 
as appropriate. 

c. Provide the risk assessment or a summary 
and/or briefings on the risk assessment to law 
enforcement and homeland security officials with 
planning, resource allocation, and budgeting 
responsibilities, including appropriate elected 
officials from the executive and legislative 
branches. 

d. Maintain mechanisms to contribute information of 
value to other state, multistate, and national-level 
risk assessments. 



12 



Baseline Capabilities for State and Major Urban Area Fusion Centers 



3. Information Requirements — The 
information requirements for the fusion 
center shall be defined, documented, 
updated regularly, and consistent with 
the center's goals and objectives as 
defined by the governance structure 
and reflect the risks identified in 

the statewide and/or regional risk 
assessment. 

a. Use the risk assessment to identify and prioritize 
the information requirements in order to 
address the risks (threats, vulnerabilities, and 
consequences) posed in the center's geographic 
area of responsibility. 

b. Create a formal process to define, communicate, 
and modify intelligence requirements and 
intelligence gathering. 

c. Establish goals and objectives for collecting, 
producing, and sharing information. 

d. Review and consider including relevant 
requirements from the national intelligence 
requirements as provided by DHS and the Federal 
Bureau of Investigation (FBI). 

e. Coordinate with the state and major urban 
area homeland security advisors and the 
DHS Protective Security Advisor(s) to ensure 
coordination and support of the National 
Infrastructure Protection Plan (NIPP). 

f. Coordinate information requirements with other 
interested agencies (local FBI Field Intelligence 
Group [FIG], Joint Terrorism Task Forces [JTTF], 
High Intensity Drug Trafficking Areas [HIDTA], etc.) 
as appropriate. 

4. Suspicious Activity Reporting (SAR) — 
Fusion centers shall develop, implement, 
and maintain a plan to support the 
establishment of a suspicious activity 
and incident reporting process for their 
geographic area of responsibility, in a 
manner consistent with the Findings 

and Recommendations of the Suspicious 
Activity Report (SAR) Support and 
Implementation Project. 12 Specifically, 

1 2 The Major Cities Chiefs Association, Global, DOJ, and DHS 

supported the development of this report, which describes "the all-crimes 
approach to gathering, processing, reporting, analyzing, and sharing of 
suspicious activity by the local police agency." 



centers shall have the ability to receive, 
process, document, analyze, and share 
SARs in a manner that complies with the 
ISE-SAR Functional Standard. 13 

a. Adhere to the state and local responsibilities for 
SARs outlined in Appendix 1 of the National 
Strategy for Information Sharing (page A1 -6). 

b. The fusion center's SAR process should 
complement and support the SAR processes 
established or being established by state or local 
law enforcement agencies within the fusion 
center's geographic area of responsibility. 

c. In cooperation with state or local law enforcement 
agencies within the fusion center's geographic 
area of responsibility that have developed or are 
developing a SAR process, the fusion center shall 
support: 

i. Defining and documenting the process to be 
used by the originating agency to ensure that 
suspicious activity reporting is made available 
to fusion centers and local JTTFs in a timely 
manner. 

ii. Developing outreach material for first 
responders, public safety, and private sector 
partners and the public to educate them 
on recognizing and reporting behaviors 
and incidents indicative of criminal activity 
associated with international and domestic 
terrorism. 

d. The fusion center, in the absence of a specified 
threat or risk, should utilize SARs to analyze 
data trends and identify any potential terrorism 
linkage or activity (including precursor activity) 
and disseminate to the JTTF and other appropriate 
federal, state, and/or local entities. 

e. The designated statewide fusion center shall 
coordinate an effort or support existing efforts to 
identify system requirements for the state's 
designated shared space 14 that will support 

13 For additional information regarding the ISE Functional Standard 
for SAR, visit http ://www. ise .gov/pages/ctiss. htm I . 

1 4 The ISE Shared Spaces concept is a key element of the ISE 
Enterprise Architecture Framework and helps resolve the information 
processing and usage problems identified by the 9/1 1 Commission. ISE 
Shared Spaces are networked data and information repositories used by 
ISE participants to make their standardized terrorism-related information, 
applications, and services accessible to other ISE participants. ISE Shared 
Spaces also provide an infrastructure solution for those ISE participants with 
national security system (NSS) network assets, historically sequestered with 
only other NSS systems, to interface with ISE participants having only civil 
network assets. Additionally, ISE Shared Spaces also provide the means for 
foreign partners to interface and share terrorism information with their U.S. 
counterparts. For more information about the ISE Shared Spaces concept, 
reference the ISE Enterprise Architecture Framework and the ISE Profile 
Architecture Implementation Strategy at www.ise.gov . 



Baseline Capabilities for State and Major Urban Area Fusion Centers 



13 



statewide reporting, tracking, and accessing of 
SARs in a manner that ensures consistent use 
of data elements and collection procedures. 
(Refer to Section II. E. Information Technology/ 
Communications Infrastructure, Systems, 
Equipment, Facility, and Physical Infrastructure; 
the ISE-SAR Functional Standard; and the Findings 
and Recommendations of the Suspicious Activity 
Report (SAR) Support and Implementation Project.) 

f. Fusion centers should support or develop training 
for law enforcement and nontraditional partners 
to identify and appropriately report suspicious 
activities, indicators, and warnings. 

5. Alerts, Warnings, and Notifications — 
Fusion centers shall ensure that 
alerts, warnings, and notifications are 
disseminated, as appropriate, to state, 
local, and tribal authorities; the private 
sector; and the general public. 

a. Fusion centers shall develop and implement 
a written policy outlining standard operating 
procedures to govern the receipt of further 
dissemination of federally generated alert, 
warning, and notification messages, consistent 
with the intrastate coordination plan called for by 
Section I.A.1 . 

b. In response to federally generated alert, warning, 
and notification messages and/or significant 
events, the fusion center shall support or facilitate 
the identification of actions that were taken by 
state, local, and tribal authorities and the private 
sector and report those back to the appropriate 
federal agency. 

c. Adhere to the state and local responsibilities 
for alerts, warnings, and notifications outlined 
in Appendix 1 of the National Strategy for 
Information Sharing (page A1 -8). 

6. Situational Awareness Reporting— 
Fusion centers shall develop processes 
to manage the reporting to key officials 
and the public of information regarding 
significant events (local, regional, 
national, and international) that 

may influence state or local security 
conditions. 

a. Fusion centers shall develop and implement 
a written policy outlining standard operating 
procedures to govern the receipt and further 



dissemination of federally generated information 
bulletins and other situational awareness messages, 
consistent with the intrastate coordination plan 
called for by Section I.A.1 . 

b. Adhere to the state and local responsibilities 
for situational awareness reporting outlined 
in Appendix 1 of the National Strategy for 
Information Sharing (page A1 -9). 

7. Data Sources — Fusion centers shall 
identify and document data sources and 
repositories needed to conduct analysis 
based on the mission of the center, 

the findings of the Risk Assessment, 
and the center's defined Information 
Requirements. 

a. Refer to Section II. E. Information Technology/ 
Communications Infrastructure, Systems, 
Equipment, Facility, and Physical Infrastructure to 
further develop plans for access to data sources 
based on the fusion center's defined mission and 
core business processes. 

8. Coordination With Response and 
Recovery Officials — Fusion centers shall 
identify and coordinate with emergency 
managers and appropriate response 
and recovery personnel and operations 
centers to develop, implement, and 
maintain a plan and procedures to 
ensure a common understanding of roles 
and responsibilities and to ensure that 
intelligence and analysis capabilities 
can be leveraged to support emergency 
management operation activities, as 
appropriate, when events require such a 
response. 

a. Ensure that the center has identified its intelligence 
and analytical roles and responsibilities 

in accordance with the National Incident 
Management System (NIMS) and Incident 
Command System (ICS). 

b. The plan should identify roles, responsibilities, 
and protocols to govern the timely reporting of 
significant events occurring within state or local 
jurisdictions to federal authorities and, when 
appropriate, other states, localities, or regional 
entities. 



Baseline Capabilities for State and Major Urban Area Fusion Centers 



c. Ensure that the plan addresses the contingency 
and continuity-of-operations (COOP) planning 
during an emergency. (See Section II. E.) 

Coordination With Private Sector and 
Critical Infrastructure and Key Resources 
(CIKR) Information Sharing— Fusion 
centers, in partnership with locally 
based federal authorities, shall develop, 
implement, and maintain a plan and 
procedures for sharing information with 
owners of CIKR and, in general, the 
private sector, in a coordinated manner. 

a. All centers shall include in the plan the procedures 
to disseminate alerts, warnings, and notifications 
and other relevant analytic reports to critical 
infrastructure sectors and/or private sector entities 
that are affected by the threat. 

b. The plan should document the decision of the 
center's governance structure — based on the 
center's mission, risk assessment, and information 
requirements — whether the center will establish 

a CIKR capability to integrate and analyze threat, 
vulnerability, and consequence data and enable 
and support state, local, and private sector 
decision making and activities to protect CIKR. 

Note: At a minimum, the baseline capabilities 
require fusion centers to have the capability to receive 
information from the private sector and disseminate 
critical information to members of the private 
sector. Beyond those baseline capabilities, some 
fusion centers are encouraged, but not required, to 
incorporate the needs of the CIKR protection activities 
into their Fusion Process. This option should be 
considered by the governance structure as a part of 
the mission development process. (See Section II.A.) 

References: For those centers interested in 
incorporating the support of CIKR into their Fusion 
Process, an appendix to this document is being 
developed that will outline the fusion center 
capabilities for supporting CIKR protection activities. 



10. Exercises — Fusion centers should 
conduct or participate in another 
agency's scenario-based tabletop and live 
training exercises to regularly assess their 
capabilities. 

a. Exercises should include simulations, games, 
tabletops, functional exercises, and full-scale field 
exercises. 

b. Exercises should involve all relevant center 
personnel and constituents and should contribute 
to understanding the value of the statewide Fusion 
Process, the center's collection plan, the SAR 
process, analytical products, the center's role in 
the Information Sharing Environment, and the 
center's role in response and recovery activities in 
accordance with NIMS and ICS. 

c. Centers should use the exercises to validate center 
operations, policies and procedures, and training 
activities and develop action plans to mitigate any 
identified gaps. 



Baseline Capabilities for State and Major Urban Area Fusion Centers 



15 




B. Information Gathering 
Collection and 
Recognition of Indicators 
and Warnings 

"The stage in which the planning and 
requirements development stage becomes 
operational... information is collected from 
various sources, including law enforcement 
agencies, public safety agencies, and the private 
sector. This stage is essential for fusion centers 
to be effective." - Guideline 1, Fusion Center 
Guidelines, p. 21. 

1. Information-Gathering and -Reporting 
Strategy— Fusion centers shall develop, 
implement, and maintain an information- 
gathering and -reporting strategy that 
leverages existing capabilities and shall 
identify methods for communicating 
information requirements and the 
overall information-gathering strategy to 
partners, to include any applicable fusion 
liaison officers. 

a. Clearly outline the collection process, including 
how the collectors of information are identified 
and tasked — or if the center lacks the authority 
to task, identify how such requests are made to 
partners. 



b. Leverage and/or coordinate with the JTTF and 
other federal, state, local, tribal and private sector 
information sharing and counterterrorism efforts. 

c. Clearly outline the processes that partner 
organizations — including law enforcement, public 
safety, private organizations, and the public — use 
to report information to the fusion center. 

d. The strategy and associated processes shall be 
consistent with the governance structure's defined, 
agreed-upon, and auditable privacy policy. 
(Reference Section II. B.) 



2. Feedback Mechanism — Fusion centers 
shall define and implement a feedback 
mechanism that: 

a. Provides the reporting entity an acknowledgement 
of the receipt of its information and, to the 
extent possible, provides feedback on the value 

of the information and actions taken with the 
information. 

b. Allows collectors to make suggestions to improve 
the strategy, plans, or processes, as well as seek 
clarification on information requirements. 

c. Allows recipients of information or products to 
make suggestions to improve products. 

3. Collection and Storage of Information — 
Fusion centers shall define the policies 
and processes and establish a mechanism 
for receiving, cataloging, and retaining 
information provided to the center. 

a. Ensure that policies, processes, and mechanisms 
comply with the center's privacy policy — 
particularly regarding data retention, purging, and 
redress. (Reference Section II.B.) 

b. Fusion centers should reference the Commission 
on Accreditation for Law Enforcement Agencies 
(CALEA) Standard 51.1.1 regarding intelligence 
collection and the types of information to collect, 
methods for purging out-of-date or incorrect 
information, and procedures for the utilization of 
intelligence personnel and techniques. 15 

c. Adhere to the Law Enforcement Intelligence Unit 
(LEIU) Criminal Intelligence File Guidelines^ 6 



15 Additional information regarding CALEA Standard 51.1.1 — 
Criminal Intelligence is available at 

http://www.calea.org/online/newsletter/no79/criminalintelligence.htm . 

16 LEIU Criminal Intelligence File Guidelines — 
http://www.it.ojp.gov/documents/LEIU Crim Intell File Cuidelines.pdf . 



16 



Baseline Capabilities for State and Major Urban Area Fusion Centers 



and the LEIU Audit Checklist for the Criminal 
Intelligence Function" for the maintenance of 
criminal intelligence files. 

d. Adhere to the collection, storage, and retention 
requirements of 28 CFR Part 23. 

e. Establish processes to routinely identify progress 
achieved against individual information 
requirements and the overall information- 
gathering strategy, and provide summary 
assessments to fusion center partners, 
management, and the governance body on a 
routine basis. 

f. The mechanism used to catalog and retain 
information shall enable timely retrieval by the 
center's analysts. 

g. Develop protocols to ensure the archiving of all 
appropriate data, information, and intelligence to 
support future efforts. 

h. To the extent the processes and mechanisms are 
automated, adhere to the Information Technology/ 
Communications Infrastructure, Systems, 
Equipment, Facility, and Physical Infrastructure 
capabilities. (Section II. E.) 




C. Processing and Collation 
of Information 

"Processing and collation involves evaluating 
the information's validity and reliability. 
Collation entails sorting, combining, 



categorizing, and arranging the data collected so 
relationships can be determined. " - Guideline 1, 
Fusion Center Guidelines, p. 20. 

1. Information Collation — Fusion center 
analysts shall use the necessary and 
available tools to process and collate 
information and intelligence to assist 
with accurate and timely analysis. 

a. Fusion center analysts should consider utilizing 
the appropriate tools identified in C lobal 's Analyst 
Toolbox to assist in the collation of information. 

b. Fusion center analysts should reference IALEIA and 
Global's Law Enforcement Analytic Standards when 
developing the processes for collating information. 

c. Fusion centers should consider the development 
or utilization of an intelligence collection system 
that allows for the collection, processing, collation, 
and storage of information related to the mission 
of the center. 

2. Levels of Confidence — Fusion centers 
shall liaise with partners to ensure that 
information collected is relevant, valid, 
and reliable. 

a. Fusion center personnel should consider regular 
meetings with information providers to discuss 
information collection requirements. 

b. Fusion center personnel should ensure that 
partners are aware of the various levels of 
confidence of information provided to the center. 

i. 28 CFR Part 23 states, "Information shall be 
labeled to indicate levels of sensitivity, levels 
of confidence, and the identity of submitting 
agencies and officers." 

ii. Levels of confidence relate to reliability, 
validity, and relevancy. 



1 7 LEIU /Audit Checklist for the Criminal Intelligence Function — 

http://it.ojp.gov/documents/LEIU audit checklist.pdf . 



Baseline Capabilities for State and Major Urban Area Fusion Centers 



17 





D. Intelligence Analysis and 
Production 

"Analysis transforms the raw data into products 
that are useful. ..the goal is to develop a report 
that connects information in a logical and 
meaningful manner to produce an intelligence 
report that contains valid judgments based on 
analyzed information. . ..One of the goals of the 
fusion center during this stage is to identify 
trends or information that will prevent a 
terrorist attack or other criminal activity." 
- Guideline 1, Fusion Center Guidelines, 
pp. 20-21. 

1. Analytic Products — Fusion centers shall 
develop, implement, and maintain 
a production plan that describes the 
types of analysis and products they 
intend to provide for their customers 
and partners (which, at a minimum, 
include Risk Assessments; Suspicious 
Activity Reporting; Alerts, Warnings, 
and Notifications; and Situational 
Awareness Reporting [see Sections 
I.A.2, 4, 5, and 6 for further details on 
these product types]), how often or in 



what circumstances the product will be 
produced, and how each product type 
will be disseminated. 

a. Adhere to the tenets in IALEIA and Clobal's 
Law Enforcement Analytic Standards booklet, 18 
particularly Standards 1 7, 20, and 21, which 
address Analytic Product Content, Report, and 
Format standards. 

b. The production plan shall be prioritized based on 
the center's mission, information requirements, 
and priority functions. 

c. Identify stakeholders and customer base for 
specific product lines and request feedback from 
customers to guide future products. 

d. Ensure the production of value-added intelligence 
products that support the development of 
performance-driven, risk-based prevention, 
protection, response, and consequence 
management programs. 

2. Fusion Process Management — An 

intelligence commander/manager should 
be designated to oversee the management 
of the Fusion Process (including the 
collection, collation, analytic function, 
dissemination, and reevaluation of 
information and intelligence) within the 
center. 

a. The commander/manager should address the day- 
to-day intelligence management functions of the 
center. 

b. The commander/manager should prioritize critical 
intelligence products and ensure that the critical 
outputs of the fusion center are accomplished. 

c. The commander/manager should have the 
necessary skill sets to oversee the production of 
intelligence products that are effective, efficient, 
and permissible under state and federal laws and 
regulations. 

d. The commander/manager should have previous 
experience and management training. 

i. Training should include the intelligence cycle, 
analytical training, intelligence management, 
the role of the fusion center, and legal issues. 



1 8 IALEIA and Clobal's Law Enforcement Analytic Standards booklet 

is available at 

http://www.it.ojp.gov/docuiTients/law_enforcement_analytic_standarcls.pdf . 



18 



Baseline Capabilities for State and Major Urban Area Fusion Centers 



3. Enhancing Analyst Skills — The fusion 
center should develop and implement a 
Training and Professional Development 
Plan to enhance analysts' critical 
thinking, research, writing, presentation, 
and reporting skills. 

a. The supervisor of the analytic function should 
work with each analyst to draft a Training and 
Professional Development Plan. Components of 
the plan should include training and mentoring 
opportunities for learning new subject matter/ 
areas of expertise and exposure to new analytic 
techniques and technologies. 

i. The initial training goal should be the 
completion of the Foundations of Intelligence 
Analysis Training program or its training 
equivalent and the certification of analysts. 

ii. Adhere to the tenets in IALEIA and Clobal's 
Law Enforcement Analytic Standards booklet, 19 
particularly Standards 1 —7 for analysts. 

iii. Utilize IALEIA and Global's Law Enforcement 
Analytic Standards and the National Criminal 
Intelligence Sharing Plan in the development of 
the training plan. 

b. Analysts should be provided routine opportunities 
to present their analytic findings and receive 
feedback on the quality of their written reports 
and oral presentations. 

c. Performance evaluations should be conducted at 
least annually, and the Training and Professional 
Development Plan updated accordingly. 

4. Information Linking — Fusion centers 
shall ensure that analysts are able to 
understand and identify the links 
between terrorism-related intelligence 
and information related to traditional 
criminal activity so they can identify 
activities that are indicative of precursor 
behaviors, terrorist activities, and threats. 
(Guidelines 12, 13, 14, Fusion Center 
Guidelines) 



1 9 IALEIA and Global's Law Enforcement Analytic Standards booklet 

is available at 

http://www.it.ojp.gov/documents/law enforcement analytic standards.pdf 



Standards for Law Enforcement and Other Criminal 
Justice Agencies in the United States. 20 

b. Ensure that analysts receive training on the analytic 
process, analytical writing and briefing skills, and 
reporting skills. 

5. Strategic Analysis Services — Fusion 
centers shall develop the capability to 
provide strategic analysis services for 
the jurisdiction served. (Guideline 14, 

Fusion Center Guidelines.) 

6. Open Source Analysis Capability — 
Fusion centers shall establish an open 
source analysis capability utilizing the 
free training and tools provided by the 
federal government. 

7. Analyst Specialization — Fusion centers 
should assign "accounts" or "specialties" 
to analysts based on the priorities of the 
fusion center, to allow the development 
of analytic depth. 

8. Analytical Tools — Fusion centers shall 
provide the necessary tools to analysts 
for the analysis of information and data. 
(Guidelines 11 and 14, Fusion Center 
Guidelines) 

a. Fusion centers should provide all tools outlined in 
Global's Ana/ys£ Toolbox document. 

b. Training should be provided for the identified 
analytic tools so that relevant personnel are 
proficient in their use. 

c. Analysts shall be provided with routine 
mechanisms to communicate with other fusion 
center analysts within the state or region. 
(Examples include "chat rooms" available via 
Homeland Security State and Local Intelligence 
Community of Interest [HS SLIC] or other 
collaborative networks or regular phone calls.) 

Analysts shall have access to and understanding of 
where to find information sources and available 
expertise to support the information priorities of 
the fusion center. 

20 The Minimum Criminal Intelligence Training Standards for Law 

Enforcement and Other Criminal justice Agencies in the United States is 
accessible at http://www.it.ojp.gov/documents/min crim intel stand.pdf . 



a. Training regarding precursor activities of terrorists d. 
should be provided to analysts and relevant fusion 
center personnel following the standards outlined 
in the Minimum Criminal Intelligence Training 



Baseline Capabilities for State and Major Urban Area Fusion Centers 



19 




E. Intelligence/Information 
Dissemination 

"The process of effectively distributing analyzed 
intelligence utilizing certain protocols in the 
most appropriate format to those in need of the 
information to facilitate their accomplishment 
of organizational goals" - Definition of 
Dissemination, Criminal Intelligence Glossary. 

1. Dissemination Plan — Fusion centers 

shall develop a high-level dissemination 
plan that documents the procedures 
and communication mechanisms for 
the timely dissemination of the center's 
various products to the core and ad hoc 
customers. 

a. The plan should be consistent with the intrastate 
coordination plan. (See Section I.A.1.) 

b. Consider a variety of methods to distribute 
information, including Web site; 

e-mail; secure portal; regional and national 
information sharing systems such as Regional 
Information Sharing Systems® (RISS), Homeland 
Security Information Network (HSIN), Law 
Enforcement Online (LEO), and HS SLIC; pager; 
fax; telephone; video teleconferencing system; 
and personal contact. (Reference Guideline 6, 
Fusion Center Guidelines, for further suggestions.) 



2. Reporting of Information to Other 
Centers — Fusion centers shall develop 
the processes and protocols for ensuring 
that relevant and vetted priority 
information is reported to fusion centers 
in other states and localities to support 
regional trends analysis. (Guideline 7, 
Fusion Center Guidelines) 

3. Reporting of Information to Federal 
Partners — Fusion centers shall 
develop the processes and protocols, 
in coordination with the FBI and DHS 
Office of Intelligence and Analysis 
(I&A), for ensuring that relevant and 
vetted priority information is reported to 
the JTTF and other appropriate federal 
agencies to support its inclusion into 
national patterns and trends analysis. 

a. In addition to the priority information processes 
(SAR; Alerts, Warnings, and Notifications; 

and Situational Awareness Reporting), share 
information to address national security and 
criminal investigations. 

b. Ensure that information provided to the federal 
government is shared according to the fusion 
center's privacy policy. (See Section II. B.) 

c. Utilize the protocols established in the SAR report, 
National Information Exchange Model (NIEM), 
and Information Exchange Package Documents for 
information exchange. 



20 



Baseline Capabilities for State and Major Urban Area Fusion Centers 




information, assists in developing an awareness 
of possible weak areas as well as potential 
threats, and strives to eliminate previously 
identified weaknesses that have been hardened 
as a result of the Fusion Process. Overall, 
this step provides an opportunity to review 
the performance or effectiveness of the fusion 
center's intelligence function." - Guideline 1, 
Fusion Center Guidelines, p. 20. 

1. Performance Evaluation — Fusion centers 
shall develop and implement a plan to 
reevaluate the center's performance of 
the intelligence cycle on a regular basis. 

a. Develop mechanisms to receive stakeholder 
feedback on all parts of the intelligence cycle. 

b. Incorporate feedback from training and exercises. 

c. Update plans and procedures as appropriate. 



2. Fusion Center Processes Review— Fusion 
centers shall establish a process to review 
and, as appropriate, update the center's 
information requirements, collection 
plan, and analytic production strategy on 
a regular basis and any time one of the 
following is received: 

a. New threat or vulnerability information; 

b. New federal or state standing or ad hoc 
information requirements; 

c. Federal or state alerts, warnings, or notifications or 
situational awareness bulletins; and/or 

d. Updated risk assessment. 



Baseline Capabilities for State and Major Urban Area Fusion Centers 



21 



Baseline Capabilities for State and Major Urban Area Fusion Centers 



Fusion Center Capability Areas 



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A. Management/Governance 

"Fusion centers will have many demands 
placed on them, and it is important to have 
clear priorities." - Guideline 2, Fusion Center 
Guidelines, p. 23. 

"Establishing a governance structure creates a 
supported environment that frames the ability 
for the center to function and operate, assign 
tasks, allocate and manage resources, and 
develop and enforce policy. " - Guideline 3, 
Fusion Center Guidelines, p. 25. 

1. Governance Structure — Fusion centers 
shall have a governance structure that 
provides appropriate representation 
for the jurisdictions and disciplines 
in the center's area of responsibility. 
(Guidelines 3, 4, and 5, Fusion Center 
Guidelines) 

a. Ensure that stakeholders have the opportunity 
to provide input into the establishment of 
the governance structure. (See Section II.A.3. 
regarding identifying stakeholders.) 

b. The center's governance body should include 
representatives from the state and local law 
enforcement and public safety disciplines. 

i. If the mission of the center is primarily law 
enforcement-focused, the center should 
include representation from the public safety 




"Examples of how to include the private 
sector in the governance structure: 

• Including representatives from the 
Sector Coordinating Councils (SCC), the 
Information Sharing and Analysis Centers 
(ISACs), or InfraGard. 

• Coordinating with an existing critical 
infrastructure or private sector advisory 
council that provides advice to the state 
or major urban area homeland security 
advisor, emergency manager, or law 
enforcement agency. 

• Leveraging the expertise of local sector 
associations or coalitions. " 



Baseline Capabilities for State and Major Urban Area Fusion Centers 



23 



discipline in at least an advisory capacity. This 
will enhance the center's ability to perform key 
baseline capabilities, including: 

a) Receiving tips from and disseminating 
alerts, warnings, notifications, and 
relevant analytic products to public safety 
organizations; and 

b) Supporting emergency management, 
response, and recovery planning activities 
based on likely threat scenarios and at-risk 
targets. 

c. The center's governance body should include 
representatives from the federal government in at 
least an advisory capacity. 

i. Include local representatives from the FBI (i.e., 
the JTTF and FIG) and appropriate components 
of DHS (i.e., Protective Security Advisor, 

U.S. Coast Guard, Federal Emergency 
Management Agency [FEMA], 
U.S. Immigration and Customs Enforcement 
[ICE], United States Secret Service [USSS], etc.). 

ii. Also consider including or coordinating with 
the following efforts as appropriate to the 
center's mission and location: HIDTAs and the 
U.S. Attorney's Office's Anti-Terrorism Advisory 
Council (ATAC). 

d. Consideration should be given to include 
the perspectives of the private sector, where 
appropriate, in at least an advisory capacity. 

e. Ensure that the governance body is composed of 
officials with decision-making authority, capable of 
committing resources and personnel to the center. 

f. Ensure that bylaws for the operations of the 
governance structure are developed and adopted 
by the governance body. 

g. The governance body shall clearly define the 
management and command structure of the 
center. 

h. The governance body should develop and approve 
key fusion center policies, including the center's 
privacy and security policies. (See Sections II. B. 
and C. for more information on Information 
Privacy Protections and Security capabilities). 

i. The governance body shall receive at least annual 
reports on the center's compliance with the 
defined privacy and security policies. 

j. Develop communication mechanisms to provide 
the governance body with feedback from center 
management and personnel, stakeholders, and 
recipients of information within the state or region. 



k. The governance body should include 

representation from and ensure that the fusion 
center management coordinates with other fusion 
centers within the state (the designated state 
fusion center and/or any UASI fusion center(s)), 
in order to identify the roles and responsibilities 
of each center in carrying out the Fusion 
Process (gathering, processing, analyzing, and 
disseminating of terrorism, homeland security, 
and law enforcement information) on a statewide 
basis. 

I. Review the governance structure and membership 
at regular intervals to determine whether 
additional organizations or disciplines should be 
included based on the current risk assessment and 
the fusion center's mission. 



2. Mission Statement — Fusion centers 

shall have a defined mission statement 
that is clear and concise and conveys the 
purpose, priority, and roles of the center. 
(Guideline 2, Fusion Center Guidelines) 

a. The governance body shall develop and adopt the 
mission statement, unless it has been predefined 
by law or executive order. 

b. In defining the mission statement, consideration 
should be given to the risks identified in the 
center's geographic area of responsibility. 

c. In defining the mission statement, the governance 
body should consider using an all-crimes approach 
and/or an all-hazards approach (see Glossary 

for definition of these terms), recognizing that 
precursor crimes or incidents may have national 
security implications. 

i. If the governance body determines that the 
center will incorporate certain public safety 
disciplines into the fusion center's mission 
and/or determines the center will use an all- 
hazards approach, centers shall adhere to the 
forthcoming appendices to this document, 
which will outline the baseline capabilities for 
incorporating the following disciplines into the 
center: 

a) Fire Service 

b) Public Health 

c) Critical Infrastructure and Key Resources 

ii. If the fusion center utilizes an all-crimes 
approach, the center should liaise with 
applicable agency and multijurisdictional task 
forces and intelligence units, including: 



24 



Baseline Capabilities for State and Major Urban Area Fusion Centers 



a) Gang task forces and intelligence units, 
as well as the National Gang Intelligence 
Center (NGIC) 21 

b) Narcotic-related task forces and intelligence 
units, as well as the National Drug 
Intelligence Center (NDIC) 

c) Violent crime/fugitive task forces and 
intelligence units 

d) Economic crime task forces and intelligence 
units 

d. The governance body shall provide oversight to 
ensure that the mission statement, the most recent 
risk assessment, and the identified customer 
needs inform the Planning and Requirements 
Development process. (See Section I. A., 
particularly the prioritizing of fusion center 
functions and tasks.) 

Collaborative Environment — Fusion 
centers shall identify the organizations 
that represent their core (permanent) 
and ad hoc stakeholders and the roles 
and responsibilities of each stakeholder 
and develop mechanisms and processes 
to facilitate a collaborative environment 
with these stakeholders. (Guidelines 4 
and 5, Fusion Center Guidelines) 

a. Review the most recent risk assessment, if 
available, and identify relevant stakeholders 
that should be included to address the highest 
identified risks. 

b. Include the identification of entities and 
individuals responsible for planning, developing, 
and implementing prevention, protection, 
response, and consequence-management efforts 
at the state, local, and tribal levels. 

c. When identifying the roles and responsibilities 
of core and ad hoc stakeholders, identify their 
needs as a customer of the center, as well as their 
contributions to the center (for example: providing 
resources such as funding, personnel, and access 
to expertise or providing access to information or 
databases). 

d. After a governance structure has been established 
and a mission statement approved, review 

the identified stakeholders and their roles and 
responsibilities to determine whether any 



additional organizations should be included or 
whether roles and responsibilities need to be 
revised based on the center's defined mission. 

e. Develop standard processes and mechanisms 
to facilitate communication between the 
stakeholders and center personnel, to include in- 
person meetings and briefings on operational and 
administrative matters, as needed. 

f. Develop and implement a Memorandum of 
Understanding (MOU) or Agreement (MOA) 
and, if needed, nondisclosure agreements (NDA) 
between the center and each stakeholder who 
intends to participate in or partner with the fusion 
center. (Review Guideline 5 for further details.) 

g. Ensure that appropriate legal authorities review the 
agreements before signature. 

h. Identify the organizations with executive and 
legislative oversight and funding responsibilities, 
and provide routine briefings on the establishment 
and operations of the center. 



Recommended Resources 

• Refer to Appendix C: 
Functional Categories, Fusion 
Center Guidelines, for a list 
of organizations, disciplines, 
and functions to consider 
including as stakeholders. 

• See Guidelines 4 and 5, Fusion 
Center Guidelines, for issues 
to consider when developing 
MO Us, MO As, and NDAs. 



21 Those fusion centers utilizing an all-crimes approach that includes 

gang-related criminal intelligence are encouraged to consult Clobal's 
Guidelines for Establishing and Operating Gang Intelligence Units and Task 
Forces to assist in the coordination and/or implementation of their efforts. 



Baseline Capabilities for State and Major Urban Area Fusion Centers 



25 



Policies and Procedures Manual — Fusion 
centers shall develop a policies and 
procedures manual for center operations. 
(Guideline 15, Fusion Center Guidelines) 

a. Include the center's mission, goals, policies, 
procedures, rules, and regulations. 

b. Include the center's privacy policy and its 
physical and information security policies within 
the manual, which should include guidance on 
the use of information specifically for criminal 
investigations and compliance with local and 
state confidentiality laws and how to safeguard 
information. 

c. Outline the roles and responsibilities of all entities 
involved in the center and their function. 

d. Outline the day-to-day management and 
command structure of the center. 

e. Include in the manual the relevant processes 
developed in accordance with the Planning and 
Requirements Development capabilities (Section 
I.A.), to include outlining how and from whom 
intelligence requirements are developed. 

f. Implement an annual review of center directives, 
and purge or revise outdated policies and 
procedures. 

Center Performance — Fusion 
centers shall define expectations, 
measure performance, and determine 
effectiveness of their operations. 
(Guideline 16, Fusion Center Guidelines) 

a. Develop outputs and outcomes that measure 
expected performance of identified mission, goals, 
and objectives. 

b. Coordinate the development and review of 
measures and performance with participating 
agencies. 

c. Create internal measures pertaining to 
administrative matters and external measures to 
evaluate the performance of the intelligence cycle. 
(See Section I.F., Reevaluation.) 

d. Utilize participation in a regular cycle of exercises 
to evaluate capabilities and assess performance. 
(See Section I.A.I 0.) 



e. To the extent possible, leverage systems and 
databases to statistically capture, store, and report 
performance. 

f. Publicize performance to the public, policymakers, 
and customers. 

6. Outreach— Fusion centers shall establish 
a policy to govern official outreach 
and communications with leaders and 
policymakers, the public sector, the 
private sector, the media, and citizens 
and develop a plan to enhance awareness 
of the fusion center's purpose, mission, 
and functions. (Guidelines 12 and 13, 
Fusion Center Guidelines) 

a. Outreach efforts should include information about 
the center's privacy policy, the Fusion Process, and 
the types of information that should be reported 
to law enforcement or the fusion center and how 
to do so. 

b. If there is more than one fusion center operating 
within the state, the centers should jointly 
determine how to communicate the value, 
roles, and responsibilities of each of the centers, 
consistent with the plan required by Section I.A.1. 

c. Develop a process to liaise with and educate 
elected officials and community leadership to 
promote awareness of center operations. 

d. Train personnel on communications policy. 



26 



Baseline Capabilities for State and Major Urban Area Fusion Centers 




B. Information Privacy 
Protections 22 

"Develop, publish, and adhere to a privacy and 
civil liberties policy. " - Guideline 8, Fusion 
Center Guidelines. 

"Protecting the rights of Americans is a core 
facet of our information sharing efforts. While 
we must zealously protect our Nation from 
the real and continuing threat of terrorist 
attacks, we must just as zealously protect the 
information privacy rights and other legal rights 
of Americans. With proper planning we can 
have both enhanced privacy protections and 
increased information sharing - and in fact, 
we must achieve this balance at all levels of 
government, in order to maintain the trust of 
the American people. " - National Strategy for 
Information Sharing, p. 27. 



22 These capabilities were developed to ensure that the privacy 

policies that fusion centers develop are at least as comprehensive as the ISE 
Privacy Guidelines (see the Methodology section for further background). 
The achievement of these capabilities will result in a fusion center privacy 
protection policy that meets the Section 1 2.d. requirement of the ISE 
Privacy Guidelines. 



Privacy Official — Fusion centers shall 
designate an individual to serve as 
the privacy official and/or establish a 
privacy committee to be responsible 
for coordinating the development, 
implementation, maintenance, and 
oversight of the privacy protection 
policies and procedures. (ISE Privacy 
Guidelines — Section 12) 

a. If the privacy official is not an attorney, the 
fusion center shall have access to legal counsel to 
help clarify laws, rules, regulations, and statutes 
governing the collection, maintenance, and 
dissemination of information and assist with the 
development of policies, procedures, guidelines, 
and operation manuals. 

b. The privacy official or committee should review 
all other fusion center policies and procedures to 
ensure consistency with the privacy policy. 

c. The privacy official or committee shall coordinate 
with the center's designated security officer to 
ensure that security measures provide the proper 
protection to information in compliance with all 
applicable laws and the center's privacy policy 
protection policies. 

d. Identify stakeholders to include nongovernment 
organizations, advocates, the media, and others 
that are essential to the development and 
implementation of the privacy policy. 

i. To the extent possible, fusion centers should 
use existing outreach mechanisms, such as a 
state or local government's privacy advisory 
committee, or outreach conducted by the state 
or local law enforcement or homeland security 
organizations to facilitate engagement with the 
community and privacy advocacy groups. 

Privacy Policy Development— In 
developing the privacy policy, fusion 
centers shall: 

a. Develop guidance statements that include the 
vision, mission, values statements, goals, and 
objectives for the creation of the privacy policy. 
(ISE Privacy Guidelines — Section 3) 

b. Develop a project charter that will include an 
introduction, background, membership, and the 
previously drafted guidance statements. 

c. Analyze the flow of information and the legal 
environment for the protection of privacy 



Baseline Capabilities for State and Major Urban Area Fusion Centers 



27 



to identify what gaps exist between existing 
technological and legal requirements. 

i. Information flow analysis helps determine what 
personally identifiable information the agency 
collects, uses, maintains, and disseminates. (ISE 
Privacy Guidelines — Section 4) 

a) Identify the fusion center's data holdings 
and establish mechanisms to ensure their 
review before protected information is 
shared through the ISE. 

b) Establish mechanisms to identify the 
nature of protected information so it can 
be handled in accordance with applicable 
legal requirements. 

ii. All policies and procedures are compliant with 
the U.S. Constitution, the state's constitution, 
applicable laws, and executive orders. (ISE 
Privacy Guidelines — Section 2) 

a) Conduct a rules assessment and adopt 
policies and procedures requiring the fusion 
center to seek, receive, or retain only the 
protected information which it is legally 
permitted to seek, receive, or retain and 
which was lawfully obtained. 

b) Establish a process to allow for the ongoing 
identification and assessment of new and/or 
revised laws, court decisions, and policies 
that impact issues related to privacy, civil 
rights, and civil liberties. 

c) If an issue posing a significant risk to privacy 
is identified, develop policy and procedural 
protections. 

d. Perform a gap analysis to identify legal and 
technological gaps. 

e. Vet the privacy protection policy internally and 
externally during its development by soliciting 
commentary and buy-in from stakeholders and 
agency constituents prior to finalizing the policy. 

f. Formally adopt a privacy protection policy to 
guide the collection, use, maintenance, and 
dissemination of personal information. (ISE Privacy 
Guidelines — Section 12.d.) 

i. Obtain formal adoption of the policy by the 
project team, privacy and civil liberties officer, 
the fusion center's governance structure and, if 
applicable, any legislative body. 



3. Privacy Protections — Fusion centers 

shall develop and implement a privacy 
protection policy that ensures that the 
center's activities (collection/gathering, 
analysis, dissemination, storage, and 



use of information) are conducted in 
a manner that protects the privacy, 
civil liberties, and other legal rights 
of individuals protected by applicable 
law, while ensuring the security of the 
information shared. The policy shall 
cover all center activities and shall 
be at least as comprehensive as the 
requirements set forth in the Information 
Sharing Environment Privacy Guidelines 
and consistent with 28 CFR Part 23 
and DOJ's Global Privacy and Civil 
Liberties Policy Development Guide and 
Implementation Templates. 

a. The privacy protection policy shall include 
procedures to ensure data quality. (ISE Privacy 
Guidelines — Section 5) 

i. Establish accuracy procedures to ensure that 
information is accurate, and prevent, identify, 
and correct errors regarding (1) protected 
information and (2) any erroneous sharing of 
information in the ISE. 

ii. Establish and implement a process to provide 
written error notice of any potential error 

or deficiency to the privacy official of the 
source agency when it is determined that 
the protected information received may 
be erroneous, includes incorrectly merged 
information, or lacks adequate context such 
that the rights of the individual may be 
affected. 

iii. Adopt and implement the ISE policies and 
procedures for merger of information, 
investigation, and correction/deletion/nonuse 
of erroneous or deficient information, and 
retain only information that is relevant and 
timely for its appropriate use. 

b. Establish criteria for types of information that 
partners can submit to the center. 

c. Include provisions for the use of privately held 
data systems information and commercially 
obtained data. 

d. Review the center's security policies and ensure 
that they are sufficient for providing appropriate 
physical, technical, and administrative measures 
to safeguard protected information. (See Section 
II. C. and ISE Privacy Guidelines — Section 6.) 

i. Ensure that the center's privacy and civil 
liberties policy articulates a process for 



28 



Baseline Capabilities for State and Major Urban Area Fusion Centers 



responding to and addressing security 
breaches, in coordination with the center's 
designated security officer. (See Section M.C.2.) 

e. The privacy protection policy shall include 
documentation on how the policies and 
procedures meet the following ISE Privacy 
Guidelines requirements (ISE Privacy Guidelines — 
Section 1 2): 

i. Fusion centers shall adopt policies and 
procedures limiting the sharing of information 
through the ISE to terrorism, homeland 
security, and law enforcement (terrorism- 
related) information, as defined for the ISE (see 
Glossary) and ensure that access to and use of 
protected information 23 are consistent with the 
authorized purpose of the ISE. 24 (ISE Privacy 
Guidelines — Section 3) 

ii. Fusion centers shall identify protected 
information to be shared through the ISE. 



4. Privacy Policy Outreach — Fusion 
centers shall implement necessary 
outreach and training for the execution, 
training, and technology aspects of the 
privacy protection policy. (ISE Privacy 
Guidelines — Section 9) 

a. Ensure that privacy protections are implemented 
through training, business process changes, and 
system designs. 

b. Provide ongoing training to center personnel and 
any other liaison partners on the fusion center's 
privacy policies and procedures. Training should 
be tailored to the audience (management, 
analysts, collectors, consumers of center products, 
etc.) but, at a minimum, should include: 

i. An overview of the policies and procedures 
for collection, use, disclosure of protected 
information, data quality, accountability, 
enforcement, auditing, and redress. 

ii. How to report violations of the privacy policy. 



23 The term "protected information" is defined in the ISE Privacy 
Guidelines, Section 1.b., for both non-intelligence agencies and members of 
the Intelligence Community. For both federal non-intelligence agencies and 
SLT agencies, it means, at a minimum, personally identifiable information 
about U.S. citizens and lawful permanent residents. States are free to 
extend this definition to other classes of persons or to all persons (including 
organizations). 

24 The authorized purpose of the ISE is to share terrorism-related 
information in a lawful manner that protects the privacy and other legal 
rights of Americans between and among authorized recipients of such 
information. (ISE Privacy Guidelines — Section 3) 



iii. An overview of sanctions or enforcement 
mechanisms for failure to comply with the 
privacy policy. 

c. Consider and implement appropriate privacy- 
enhancing technologies. 

d. Fusion centers shall facilitate public awareness 
of their privacy protection policy by making it 
available to the public or otherwise facilitating 
appropriate public awareness. (ISE Privacy 
Guidelines — Section 10) 

5. Privacy Policy Accountability — Fusion 
centers shall ensure accountability 
with regard to the privacy protection 
policy and identify evaluation methods 
for auditing and monitoring the 
implementation of the privacy policy and 
processes to permit individual redress 
and incorporate revisions and updates 
identified through the evaluation and 
monitoring as well as redress processes. 
(ISE Privacy Guidelines — Section 7) 

a. Fusion centers shall develop or modify policies, 
procedures, and mechanisms for accountability, 
enforcement, and auditing of the center's privacy 
protection. (ISE Privacy Guidelines — Section 7) 

i. Require reporting, investigating, and 
responding to violations of the center's privacy 
protection policy. 

ii. Encourage cooperation with audits and 
reviews. 

iii. Provide for receipt of error reports by the 
agency privacy official or committee. (See 
Section B.2., above.) 

iv. Implement adequate review and audit 
mechanisms to verify the center's compliance 
with its privacy protection policy. 

v. Incorporate the core elements of the 
ISE Privacy Guidelines' Accountability, 
Enforcement, and Audit guidance into the 
fusion center ISE privacy policy. 

b. Fusion centers shall develop internal procedures 
for redress — particularly to address complaints 
from protected persons regarding personally 
identifiable information about them under fusion 
center control. (ISE Privacy Guidelines — Section 8) 

i. Incorporate the core elements of the ISE 
Privacy Guidelines Redress guidance into the 
fusion center ISE privacy protection policy. 



Baseline Capabilities for State and Major Urban Area Fusion Centers 



29 



c. Fusion centers should utilize the LEIU Audit 
Checklist for the Criminal Intelligence Function 
when reviewing their "criminal intelligence 
function to demonstrate their commitment to 
protecting the constitutional rights and the privacy 
of individuals, while ensuring the operational 
effectiveness of their criminal intelligence 
function." 25 





C. Security 

"Ensure appropriate security measures are in 
place for the facility, data, and personnel." 
- Guideline 9, Fusion Center Guidelines. 

1. Security Measures — Fusion centers shall 
establish appropriate security measures, 
policies, and procedures for the center's 
facility (physical security), information, 
systems, and personnel and visitors 
and document them in a security plan 
consistent with the NCISP, the Fusion 
Center Guidelines, Global's Applying 
Security Practices to Justice Information 
Sharing document, and 28 CFR Part 23. 
(Guidelines 8, 9, and 10, Fusion Center 
Guidelines) 



Security Of ficer — Fusion centers 
shall designate an individual to serve 
as the security officer responsible 
for coordinating the development, 
implementation, maintenance, and 
oversight of the security plan. (Guideline 
9, Fusion Center Guidelines) 

a. For fusion centers colocated with other 
organizations (e.g., HIDTA, FBI), the fusion 
center can opt to use the other organization's 
security officer, provided that the officer is 
willing to perform the capabilities required of 
the fusion center security officer. If a colocated 
organization's security officer cannot or will not 
perform all of the functions, the fusion center 
should designate an individual to partner with the 
other organization's security officer to ensure that 
each of the baseline capabilities for security is met. 

b. Ensure that the designated security officer has 
at least some exposure to or experience with 
physical, information, systems, and/or personnel 
security. 

c. Ensure that the security officer receives routine 
training in the areas of physical, information, 
systems, and personnel security, to include the 
relevant DHS- or FBI-required training if the fusion 
center intends to establish and maintain a certified 
storage environment at the Secret level. 

d. The security officer should: 

i. Conduct security training and awareness on the 
center's overall security plan and the center's 
security measures, policies, and procedures. 

ii. Provide regular updates to the center's 
management and the governance body on 
compliance with the security plan. 

iii. Coordinate with federal security officials to the 
extent needed for facilitating federal security 
clearances for personnel, facility security 
certifications, and access to federal information 
systems. (Reference Section II. E. regarding 
security clearances for personnel.) 

iv. Establish and coordinate the processes 
used to conduct background checks on all 
center personnel prior to commencement of 
duties. (Reference Section II.D.2.) 

v. Receive, document, and investigate reports 
of security violations according to the center's 
security policies. 



25 LEIU Audit Checklist for the Criminal Intelligence Function, p. i. 



30 



Baseline Capabilities for State and Major Urban Area Fusion Centers 



Securing Information— Fusion centers' 
security policies shall address the ability 
to collect, store, and share classified, 
controlled unclassified, and unclassified 
information to address homeland 
security and criminal investigations. 
(Guidelines 7 and 14, Fusion Center 
Guidelines) 

a. In coordination with the appropriate federal 
security official, develop a process to receive, 
handle, store, and disseminate Secret-level 
information, to include establishing and 
maintaining a certified storage environment 26 if 
one is not readily available. 27 

b. Fusion centers shall follow the regulations and 
processes for security management of the certified 
storage environment, as required by the federal 
security manager (i.e., DHS or FBI), to include, but 
not limited to: 

i. Certification of computers and other electronic 
devices for classified information. 

ii. Storage of both paper and electronic media 
containing classified information. 

iii. Level of security clearance required to access 
the facility without escort. 

iv. Processes for certifying the security clearances 
of individuals assigned to or visiting the facility. 

v. Rules for access with escort for individuals 
not holding the requisite level of security 
clearance. 

vi. Processes for derivative classification and 
marking of classified information created 
within the facility. 

vii. Processes for dealing with any security 
incidents or violations that may take place. 




c. In coordination with the appropriate federal 
agencies, establish a policy to receive, handle, 
store, and disseminate federal information that 
is provided under the Controlled Unclassified 
Information Framework. (See Glossary.) 



26 Certified storage environments will either be DHS-certified Open 
Storage Secret or the equivalent FBI-certified closed storage environment. 
NOTE: The Open Storage authorization granted by DHS applies only to 
computer systems and not to document storage. 

27 DHS and the FBI have agreed to allocate the responsibilities 
for the following support to fusion centers to minimize redundancy: 
establishing operating classified work environments, getting personnel 
cleared to be able to access classified information, providing ways to 
communicate with the federal government, and other technical assistance. 
See the most recent version of the Federal Coordinated Support Plan for 
further information regarding these efforts. 



d. Ensure that security policies allow for timely 
distribution of the center's intelligence products to 
the center's constituency base, which may include 
daily, weekly, and monthly analysis reports and 
assessments; advisories; alerts; warnings; executive 
reports; briefings; etc. 

e. If a fusion center has chosen to incorporate the 
CIKR discipline, it shall have the ability to collect, 
store, and share Chemical-terrorism Vulnerability 
Information (CVI) (in accordance with 6 CFR 
Part 27), Safeguards Information (SGI), Sensitive 
Security Information (SSI) (in accordance with 
49 CFR Part 1 520), and Protected Critical 
Infrastructure Information (PCM) in accordance 
with the PCII Final Rule. 

f. Consider whether a state law for security and 
confidentiality of public and private sector data is 
needed. 

g. Adopt established, accredited models for 
secure horizontal and vertical information and 
intelligence sharing (e.g., RISS, LEO, HSIN, 
OneDOJ). 



h. Ensure that controls and safeguards for data access 
to all appropriate systems are in place. 




D. Personnel and Training 

"Achieve a diversified representation of 
personnel based on the needs and functions 
of the center." - Guideline 11, Fusion Center 
Guidelines. 

1. Staffing Plan — Fusion center managers 
should develop a staffing plan based 
on the center's mission and goals and 
update as needed based on the current 



Baseline Capabilities for State and Major Urban Area Fusion Centers 



31 



information requirements, collection 
strategy, and analytic production plan. 
(Guideline 11, Fusion Center Guidelines) 

a. Managers should determine which positions 
require access to classified national security 
information based on the roles and responsibilities 
of the position and, through the center's security 
officer, make the request for national security 
clearances to the federal security manager. 28 

b. Where appropriate, make clear when employment 
is contingent upon the applicant's ability to meet 
the requirements necessary for receiving national 
security clearances. 

c. Adhere to the education and hiring standards for 
analysts in IALEIA and Clobal's Law Enforcement 
Analytic Standards booklet. 29 

d. The staffing plan should address the following 
support of functions: administration, information 
technology, communications, graphics, designated 
security officer (Section II. C), and designated 
privacy official (Section II. B.). 

e. The staffing plan should address the center's 
requirements to access legal counsel to help clarify 
laws, rules, regulations, and statutes governing 
the collection, maintenance, and dissemination 

of information and liaison with the development 
of policies, procedures, guidelines, and operation 
manuals. (Also required by Section II.B.2.a.) 



2. Background Checks — Ensure that 
background checks are conducted on 
center personnel (whether private or 
public) prior to the commencement of 
duties. (NCISP Recommendation 27 and 
Guideline 9, Fusion Center Guidelines) 



3. Training Plan — Fusion centers shall 
develop and document a training plan 
to ensure that personnel and partners 
understand the intelligence process and 
the fusion center's mission, functions, 
plans, and procedures. The plan shall 
identify the basic training needs of all 
center personnel and identify specialized 



training needed to address the center's 
mission and current information 
requirements. (Guidelines 12 and 13, 

Fusion Center Guidelines) 

a. Reference each capability grouping for further 
details on minimum training requirements 
for particular capabilities (e.g., Analysis and 
Production, Management and Governance, 
Information Privacy Protections, and Security). 

b. At a minimum, all center personnel should be 
trained on: 

i. The intelligence process and types of 
intelligence, crime-specific training, and how 
these factors contribute to implementation 
of the center's collection plan, through the 
use of the NCISP training objectives and 

the Minimum Criminal Intelligence Training 
Standards for Law Enforcement and Other 
Criminal Justice Agencies in the United States. 

ii. Roles and responsibilities of intelligence and 
analytical functions in accordance with NIMS 
and ICS. 

iii. The center's privacy and security policies and 
protocols. 

c. Training should be provided to all fusion center 
personnel upon assignment to the center and 
include regular retraining. 

i. All fusion center personnel — including analysts, 
intelligence officers, and non-law enforcement 
personnel assigned to the center (corrections, 
fire services, public health, private sector, and 
others) — assigned both full-time, part-time, and 
on an "as needed" basis should be included in 
the training plan. 

d. See Guidelines 12 and 1 3, Fusion Center 
Guidelines, for additional information. 



28 See Footnote 21 . 

29 IALEIA and Global's Law Enforcement Analytic Standards booklet 
is available at 

http://www.it.ojp.gov/docurnents/law enforcement analytic standards.pdf. 



32 



Baseline Capabilities for State and Major Urban Area Fusion Centers 




E. Information Technology/ 
Communications 
Infrastructure, Systems, 
Equipment, Facility, and 
Physical Infrastructure 

"Integrate technology, systems, and people." 
-Guideline 10, Fusion Center Guidelines. 

1. Business Processes Relating to 
Information Technology — Fusion 
centers shall identify and define their 
business processes prior to purchasing 
or developing information technology, 
communications infrastructure, systems, 
or equipment to handle those processes. 

a. Utilize the methodology and templates for 

analyzing the fusion center's business architecture 
provided by the Global document Fusion Center 
Business Architecture. 

2. Information Exchange within the 
Center — Fusion centers shall establish 
an environment in which center 
personnel and partners can seamlessly 
communicate — effectively and efficiently 
exchanging information in a manner 
consistent with the business processes 
and policies of the fusion center. 
(Guidelines 6, 7, and 10, Fusion Center 
Guidelines) 



a. Ensure that appropriate personnel are colocated 
and/or virtually integrated within the center. 

b. Leverage databases, systems, and networks 
available from participating entities to maximize 
information sharing, and plan for future 
connectivity to other federal, state, local, and tribal 
systems under development. 

c. Utilize the latest version of NIEM for information 
exchange. 

d. Maintain a repository of information to be made 
available to the Information Sharing Environment, 
which will be a component of ISE Shared Spaces. 30 

Communications Plan — Fusion centers 
shall have a plan to ensure safe, 
secure, and reliable communications, 
including policies and audit capabilities. 
(Guideline 18, Fusion Center Guidelines) 

a. Identify how fusion center partners will 
communicate during an incident or emergency. 
Ensure that existing communications capabilities 
are interoperable. 

b. Incorporate current communications plans utilized 
by law enforcement and emergency services. 

c. Ensure that redundancy is incorporated into the 
plan. 

d. Test the communications plan on a routine basis 
to ensure operability and maintenance of current 
contact information for fusion center participants. 

e. See Guideline 1 8 for recommended aspects of the 
communications plan. 

Contingency and Continuity-of- 
Operations Plans — Fusion centers shall 
have contingency and continuity-of- 
operations plans to ensure sustained 
execution of mission-critical processes 
and information technology systems 
during an event that causes these systems 
to fail and, if necessary, to ensure 
performance of essential functions at an 
alternate location during an emergency. 
(Guidelines 9, 10, and 18, Fusion Center 
Guidelines) 



30 See Footnote 14 or the Glossary for more information on the ISE 

Shared Spaces concept. 



Baseline Capabilities for State and Major Urban Area Fusion Centers 



33 



a. Conduct a threat/vulnerability assessment to 
determine risk to the facility, data, and personnel. 

b. Develop the plans in coordination with emergency 
managers and other appropriate response and 
recovery officials. (See Section I.A.8.) 

c. Clearly define personnel roles and responsibilities 
during emergency situations. 

d. Ensure that contact information for the 
constituency is up to date. 

e. Ensure redundancy of infrastructure, resources, 
personnel, communications, and systems. 

f. Establish an emergency power source. 

g. Conduct continuity-of-operations exercises to 
ensure the operational resiliency of the center. 

h. Reference Guidelines 9, 1 0, and 1 8 for 
recommended aspects for developing contingency 
and continuity-of-operations plans. 



a. Base funding on center priorities identified by 
center leadership. 

b. Identify capability gaps and develop an investment 
strategy and resource plan to achieve the baseline 
capabilities. 

c. Establish an operational budget. 

d. Leverage existing resources/funding from 
participating entities and identify supplemental 
funding sources. 

e. Ensure that resource commitment of participating 
entities is addressed in the MOU. 

f. Identify return on investment for fusion center 
partners. 

g. Engage executive and legislative officials who have 
oversight and funding responsibilities, and provide 
routine briefings on the establishment, operations, 
and budgetary needs of the center. 

h. Ensure that the investment strategy is 
communicated to and coordinated with the 
state homeland security advisor (HSA) and 
State Administrative Agency (SAA) to ensure 
coordination and support of the state's homeland 
security strategy and any respective state and/or 
urban area grant program investment justifications. 



s J 

F. Funding 

"Establish and maintain the center based on 
funding availability and sustainability." 
-Guideline 17, Fusion Center Guidelines. 

1. Investment Strategy — Fusion centers 
shall develop an investment strategy to 
achieve and sustain baseline capabilities 
for the center's operations, including a 
delineation of current and recommended 
future federal versus nonfederal costs. 
(Guideline 17, Fusion Center Guidelines) 



34 



Baseline Capabilities for State and Major Urban Area Fusion Centers 



Excerpt from Department of Homeland Security, 
201 1 National Network of Fusion Centers, Final Report, 
May 2012 



APPENDIX B 




Appendix 1 

201 1 Assessment Attributes 
and Scoring 



Individual fusion center scores are calculated using the validated Assessment data from 50 attributes aligned to 
the four Critical Operational Capabilities (COC) and four Enabling Capabilities (EC). Each COC is worth 20 points, 
and the ECs combined are worth 20 points (i.e., 5 points each) for a total of 1 00 points. Since attributes are not 
equally distributed across the COCs and ECs, the value of each attribute between capabilities varies. Each attribute 
is worth a specific value, and an individual fusion center is credited the value once it has successfully achieved 
an attribute. Out of 50 attributes, 30 attributes are aligned to the COCs, and 20 attributes are aligned to the ECs. 
Below is a list of attributes organized according to COCs and ECs. 



COC1: Receive 



5 Attributes 



Fusion Center Attributes 



1. Fusion center has approved plans, policies, or standard operating procedures (SOP) for the receipt of federally 
generated threat information 



2. Fusion center has a plan, policy, or SOP that addresses the receipt and handling of National Terrorism 
Advisory System (NTAS) alerts 



3. Fusion center staff with a need to access classified information are cleared to at least the Secret level 



4. Fusion center has access to sensitive but unclassified information systems (e.g., Homeland Security 

Information Network [HSIN], Law Enforcement Online [LEO], Homeland Security State and Local Community 
of Interest [HSSLIC]) 



5. Fusion center has access to the Homeland Secure Data Network (HSDN) and/or the Federal Bureau of 
Investigation Network (FBINet) (i.e., within fusion center or on-site) 



201 1 National Network of Fusion Centers Final Report / 45 



COC2: Analyze 



11 Attributes 



Fusion Center Attributes 



1. 


Fusion center has approved plans, policies, or SOPs for assessing the local implications of time-sensitive and 
emerging threat information 


2. 


Fusion center has a documented analytic production plan 


3. 


Fusion center has access to multidisciplinary subject matter experts (SME) within its area of responsibility 
(AOR) to inform analytic production 


4. 


Fusion center has access to multidisciplinary SMEs outside of its state to inform analytic production, as 
required 


5. 


Fusion center has a process to provide the U.S. Department of Homeland Security (DHS) with information 
and/or intelligence that offers a local context to threat information in the event of an NTAS-related alert 


6. 


Fusion center conducts threat assessments within its AOR 


7. 


Fusion center contributes to or conducts a statewide risk assessment (threat, vulnerability, and consequence 
analysis) 


8. 


Fusion center contributes to national-level risk assessments 


9. 


Fusion center has a customer satisfaction mechanism for its analytic products 


10. 


Fusion center evaluates the effectiveness of the customer feedback mechanism on an annual basis 


11. 


All fusion center analysts have received at least 20 hours of issue-specific training in the past 1 2 months 


COC 3: Disseminate 6 Attributes 


Fusion Center Attributes 


1. 


Fusion center has approved plans, policies, or SOPs governing the procedures for the timely dissemination of 
products to customers within its AOR 


2. 


Fusion center has a dissemination matrix 


3. 


Fusion center has a primary sensitive but unclassified mechanism to disseminate time-sensitive information 
and products 


4. 


Fusion center has a plan, policy, or SOP that addresses dissemination of NTAS alerts to stakeholders within its 
AOR 


5. 


Fusion center has a mechanism to disseminate NTAS alerts 


6. 


Fusion center has a process for verifying the delivery of products to intended customers 



46 / 20 1 1 National Network of Fusion Centers Final Report 



COC4: Gather 



8 Attributes 



Fusion Center Attributes 


1. 


Fusion center has an approved Nationwide Suspicious Activity Reporting (SAR) Initiative (NSI) site plan or an 
approved plan, policy, or SOP governing the gathering of locally generated information 


2. 


Fusion center has a tips and leads process 


3. 


Fusion center has a process for identifying and managing information needs 


4. 


Fusion center has a process for managing the gathering of locally generated information to satisfy the fusion 
center's information needs 


5. 


Fusion center has approved Standing Information Needs (SIN) 


6. 


Fusion center has an annual process to review and refresh SINs 


7. 


Fusion center has a request for information (RFI) management process 


8. 


Fusion center has a process to inform DHS of protective measures implemented within its AOR in response to 
an NTAS alert 


EC 1: Privacy, Civil Rights, and Civil Liberties (P/CRCL) Protections 6 Attributes 


Fusion Center Attributes 


1. 


Fusion center has a privacy policy determined by DHS to be at least as comprehensive as the Information 
Sharing Environment (ISE) Privacy Guidelines 


2. 


Fusion center provides formal and standardized training to all personnel on the fusion center's privacy policy 
annually 


3. 


Fusion center's policies, processes, and mechanisms for receiving, cataloging, and retaining information 
(provided to the center) comply with 28 CFR Part 23 


4. 


Fusion center trains all personnel who access criminal intelligence systems in 28 CFR Part 23 


5. 


Fusion center has identified a P/CRCL Officer for the center 


6. 


Fusion center has a privacy policy outreach plan 



201 1 National Network of Fusion Centers Final Report / 47 



EC 2: Sustainment Strategy 5 Attributes 



Fusion Center Attributes 


1. 


Fusion center has an approved strategic plan 


2. 


Fusion center conducts an annual financial audit 


3. 


Fusion center completes an annual operational cost assessment 


4. 


Fusion center participates in an exercise at least once a year 


5. 


Fusion center measures its performance and determines the effectiveness of its operations relative to 
expectations it or its governing entity has defined 


EC 3: Communications and Outreach 3 Attributes 


Fusion Center Attributes 


1. 


Fusion center has a designated Public Information Officer or Public Affairs Officer 


2. 


Fusion center has an approved communications plan 


3. 


Fusion center has a process for capturing success stories 


EC 4: Security 6 Attributes 


Fusion Center Attributes 


1. 


Fusion center has an approved security plan that addresses personnel, physical, and information security 


2. 


Fusion center trains all personnel on the fusion center's security plan 


3. 


Fusion center has a designated Security Liaison 


4. 


Fusion center's Security Liaison (or other organization's Security Liaison) completes annual training 


5. 


Fusion center has access to the Central Verification System (CVS) 


6. 


Fusion center's Security Liaison (or other organization's Security Liaison) is trained on how to use CVS 



48 / 20 1 1 National Network of Fusion Centers Final Report